A Specific Factor Model of FTAA and North Carolina Textile and Apparel Industries

Textile and apparel industries in the US face import competition that promises to increase under the Free Trade Area of the Americas. The present paper utilizes a specific factors model of production and trade to predict the potential impact of FTAA on the textile and apparel industries in North Carolina. Income is redistributed across six labor skill groups in North Carolina, and returns to capital in textiles and apparel fall as does output. In spite of falling prices for textiles and apparels, the model predicts higher wages based on rising prices of other products.