Import Competition, Government Subsidies, and Trade with Developing Countries

Highlights the important characteristics of current programmes of industrial adjustment in import‐competing industries in the OECD countries, with particular reference to the textiles, clothing, and footwear (TCF) sectors. Assesses the implications of investment subsidies to the TCF sectors for trade relations with developing countries. Concludes that, unlike trade barriers that are, at least in principle, temporary in nature, investment subsidies have fostered permanent obstacles to the growth of trade between the developed and the developing countries.