makes difference among the quality of clothing consumed by developed and developing countries.

Figures 1 to 6 chart the changing structure of trade, supply and demand in 1968, 1977 and 1987 based on tables 6 and 7. They enable us to compare changing production and trade structure between developed countries, such as Japan, EC and U.S. and developing countries, such as the Asian NIEs, ASEAN and China.

Structure in the 1960s and the 1970s: Cotton fabrics

The changing structure of cotton fabrics production and trade during the 1960s and 1970s is explained by the 'catch-up effect'. The catch-up effect means that less developed countries which started production later than developed countries reach the same level of competitiveness as developed countries.

To facilitate a better grasp of the catch-up effect using the matrix analysis, the export growth rate from each Asian country to the United States and EC and the latter countries' import growth rate are presented in Table 7. Further, the temporal changes of each Asian country's export share in the US and EC markets are presented in Table 8. These tables show the changing export competitiveness of each Asian country by means of their export growth rate and export share in the developed countries' markets.

Japan, which showed a markedly big export surplus in 1968, steadily reduced its export share and growth rate in the later period. In particular, its export decrease in the US market is remarkable. This indicates that Japanese competitiveness steadily declined during the 1970s.

Japanese export reduction in the US market was due to the export increase from the ASEAN countries and China. Although export from ASEAN to the US remained unchanged in table 7, it is clear that the share of its export increased according to table 8. In ASEAN, domestic demand exceeded production, with a trade deficit in 1968. After that, its domestic production and export increased rapidly, while import declined during the 1970s. As a result, ASEAN as a whole became a net exporter in 1977, indicating that ASEAN competitiveness in cotton fabrics got to the level of countries with export surplus.

As for the Asian NIEs, its export surplus remained big throughout the 1960s to 1970s. It had a 30% export share in the US market though the share in the EC market declined. The reduced share in the EC and Japanese markets was due to export increases of the ASEAN countries.

Product reduction in the developed countries in 1970's was caused by a demand shift to synthetic products and reduction of domestic demand, accompanied by rapid increases in clothing imports.

These catch-up effects are explained by the “Catching-Up Product Cycle” (CPC) theory.

Figure 7 charts the CPC development of cotton fabrics of the selected countries from the 1960s to the 1980s using the import/demand ratio (M/D) and the export/production ratio (X/S). The two ratios are often used to measure the progress of import substitution and export expansion, respectively in each period. South Korea is selected as the representative of the Asian NIEs, and Thailand and Indonesia are the representatives of the ASEAN countries.

Among the Asian countries, Japan was the only cotton producing and exporting country