The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 1994, imposing quotas on the amount developing countries could export to developed countries. Its successor, the Agreement on Textiles and Clothing (ATC), expired on 1 January 2005.
Since the (re)emergence of developing countries as a source of cotton textile production, after the Textile manufacture during the Industrial Revolution, such as India, Bangladesh, and Pakistan's Khadi production in the Swadeshi movement initiated by Mahatma Gandhi, cotton production from these countries steadily increased after colonial independence. A number of treaties concerning Short-Term Arrangements regarding International Trade in Cotton Textiles (Geneva, 21 July 1961); Long-Term Arrangement regarding International Trade in Cotton Textiles (Geneva, 9 February 1962 and 15 June 1970), and Arrangement regarding International Trade in Textiles (Geneva, 20 December 1973) attempted to address the issue of what seemed a natural dominance of developing world in cotton textile production at the time. Eventually, the Multi Fibre Agreement was established in 1974.
Impact
The MFA was introduced in 1974 as a short-term measure intended to allow developed countries to adjust to imports from the developing world. Developing countries and countries without a welfare state[1] have a comparative advantage in textile production because it is labor-intensive and their poor social insurance systems allow them low labor costs.[2] According to a World Bank/International Monetary Fund (IMF) study, the system has cost the developing world 27 million jobs and $40 billion a year in lost exports.[3] Developing countries have resisted moves such as a social clause in tariff agreements, to link them to improvements in working conditions.
The Arrangement was not negative for all developing countries. For example, the European Union (EU) imposed no restrictions or duties on imports from the emerging countries, such as Bangladesh, leading to a massive expansion of the industry.[citation needed]
At the General Agreement on Tariffs and Trade (GATT) Uruguay Round, it was decided to bring the textile trade under the jurisdiction of the World Trade Organization. The Agreement on Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the MFA. This process was completed on 1 January 2005. However, large tariffs remained in place on many textile products.[citation needed]
Bangladesh was expected to suffer the most from the ending of the MFA, as it was expected to face more competition, particularly from China. However, this was not the case. It turns out that even in the face of other economic giants, Bangladesh's labor is "cheaper than anywhere else in the world." While some smaller factories were documented making pay cuts and layoffs, most downsizing was essentially speculative – the orders for goods kept coming even after the MFA expired. In fact, Bangladesh's exports increased in value by about $500 million in 2006.[4]
However, poorer countries within the developed world, such as Greece and Portugal, are expected to lose out.[citation needed]
During early 2005, textile and clothing exports from China to the West grew by 100% or more in many items, leading the US and EU to cite China's WTO accession agreement allowing them to restrict the rate of growth to 7.5% per year until 2008. In June, China agreed with the EU to limit the rate to 10% for 3 years. No such agreement was reached with the US, which imposed its own import growth quotas of 7.5% instead.[citation needed]
When the EU announced their new quotas to replace the lapsed MFA, Chinese manufacturers accelerated their shipping of the goods intended for the European market. This used up a full year's quota almost immediately.[citation needed] As a result, 75 million items of imported Chinese garments were held in European ports in August 2005. A diplomatic resolution was reached at the beginning of September 2005 during Tony Blair's visit to China, putting an end to a situation the UK press had dubbed "Bra Wars".
^"Ethical Fashion Forum: alternative trade page". PlanB4fashion. 16 December 2015. Retrieved 17 December 2015.
^"Trade, Tariffs and Barriers". Ethical Fashion Forum. Retrieved 13 September 2015.
^Presentation by H.E. K.M. Chandrasekhar, Chairman ITCB, EC Conference on the Future of Textiles and Clothing after 2004, Brussels, 5 – 6 May 2003. http://www.itcb.org/Documents/ITCB-MI35.pdf 2016-12-27 at the Wayback Machine
BBC News Online: EU warns China on textile exports, 24 April 2005
New York Times: China to Limit Textile Exports to Europe, 11 June 2005
BBC News Online: EU and China reach textile deal, 5 September 2005
Dollars & Sense: Falling Off a Cliff: Millions of garment workers worldwide stand to lose their jobs with this year's changes in global textile trade rules September/October 2005
As regards the EU-China trade relations, see Paolo Farah (2006) Five Years of China’s WTO Membership. EU and US Perspectives about China’s Compliance with Transparency Commitments and the Transitional Review Mechanism, Legal Issues of Economic Integration, Kluwer Law International, Volume 33, Number 3, pp. 263–304.
Text of MFA from Stanford GATT Archive
Text of MFA plus subsequent amendments etc from GATT Archive
April 30, 2023
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The Multi Fibre Arrangement MFA governed the world trade in textiles and garments from 1974 through 1994 imposing quotas on the amount developing countries could export to developed countries Its successor the Agreement on Textiles and Clothing ATC expired on 1 January 2005 Contents 1 History 2 Impact 3 See also 4 References 5 External linksHistory EditSee also History of cotton Since the re emergence of developing countries as a source of cotton textile production after the Textile manufacture during the Industrial Revolution such as India Bangladesh and Pakistan s Khadi production in the Swadeshi movement initiated by Mahatma Gandhi cotton production from these countries steadily increased after colonial independence A number of treaties concerning Short Term Arrangements regarding International Trade in Cotton Textiles Geneva 21 July 1961 Long Term Arrangement regarding International Trade in Cotton Textiles Geneva 9 February 1962 and 15 June 1970 and Arrangement regarding International Trade in Textiles Geneva 20 December 1973 attempted to address the issue of what seemed a natural dominance of developing world in cotton textile production at the time Eventually the Multi Fibre Agreement was established in 1974 Impact EditThe MFA was introduced in 1974 as a short term measure intended to allow developed countries to adjust to imports from the developing world Developing countries and countries without a welfare state 1 have a comparative advantage in textile production because it is labor intensive and their poor social insurance systems allow them low labor costs 2 According to a World Bank International Monetary Fund IMF study the system has cost the developing world 27 million jobs and 40 billion a year in lost exports 3 Developing countries have resisted moves such as a social clause in tariff agreements to link them to improvements in working conditions The Arrangement was not negative for all developing countries For example the European Union EU imposed no restrictions or duties on imports from the emerging countries such as Bangladesh leading to a massive expansion of the industry citation needed At the General Agreement on Tariffs and Trade GATT Uruguay Round it was decided to bring the textile trade under the jurisdiction of the World Trade Organization The Agreement on Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the MFA This process was completed on 1 January 2005 However large tariffs remained in place on many textile products citation needed Bangladesh was expected to suffer the most from the ending of the MFA as it was expected to face more competition particularly from China However this was not the case It turns out that even in the face of other economic giants Bangladesh s labor is cheaper than anywhere else in the world While some smaller factories were documented making pay cuts and layoffs most downsizing was essentially speculative the orders for goods kept coming even after the MFA expired In fact Bangladesh s exports increased in value by about 500 million in 2006 4 However poorer countries within the developed world such as Greece and Portugal are expected to lose out citation needed During early 2005 textile and clothing exports from China to the West grew by 100 or more in many items leading the US and EU to cite China s WTO accession agreement allowing them to restrict the rate of growth to 7 5 per year until 2008 In June China agreed with the EU to limit the rate to 10 for 3 years No such agreement was reached with the US which imposed its own import growth quotas of 7 5 instead citation needed When the EU announced their new quotas to replace the lapsed MFA Chinese manufacturers accelerated their shipping of the goods intended for the European market This used up a full year s quota almost immediately citation needed As a result 75 million items of imported Chinese garments were held in European ports in August 2005 A diplomatic resolution was reached at the beginning of September 2005 during Tony Blair s visit to China putting an end to a situation the UK press had dubbed Bra Wars See also EditQuota Elimination Outward Processing ArrangementReferences Edit Ethical Fashion Forum alternative trade page PlanB4fashion 16 December 2015 Retrieved 17 December 2015 Trade Tariffs and Barriers Ethical Fashion Forum Retrieved 13 September 2015 Presentation by H E K M Chandrasekhar Chairman ITCB EC Conference on the Future of Textiles and Clothing after 2004 Brussels 5 6 May 2003 http www itcb org Documents ITCB MI35 pdf Archived 2016 12 27 at the Wayback Machine Haider Mahtab Defying predictions Bangladesh s garment factories thrive The Christian Science Monitor 7 Feb 2006 11 Feb 2007 http www csmonitor com 2006 0207 p04s02 wosc htmlExternal links EditBBC News Online EU warns China on textile exports 24 April 2005 New York Times China to Limit Textile Exports to Europe 11 June 2005 BBC News Online EU and China reach textile deal 5 September 2005 Dollars amp Sense Falling Off a Cliff Millions of garment workers worldwide stand to lose their jobs with this year s changes in global textile trade rules September October 2005 As regards the EU China trade relations see Paolo Farah 2006 Five Years of China s WTO Membership EU and US Perspectives about China s Compliance with Transparency Commitments and the Transitional Review Mechanism Legal Issues of Economic Integration Kluwer Law International Volume 33 Number 3 pp 263 304 Text of MFA from Stanford GATT Archive Text of MFA plus subsequent amendments etc from GATT Archive MultifibRearrangement BA Thesis Blog Retrieved from https en wikipedia org w index php title Multi Fibre Arrangement amp oldid 1113612663, wikipedia, wiki, book, books, library,
