What Is Multi Fibre Agreement

Since the (re)emergence of developing countries as a source of cotton textile production, after textile production during the Industrial Revolution, such as India, Bangladesh and Pakistan`s Khadi production in the Swadeshi movement initiated by Mahatma Gandhi, the cotton production of these countries steadily increased after colonial independence. A series of short-term agreements on international trade in cotton textiles (Geneva, 21 July 1961); The Long-Term Agreement on International Trade in Cotton Textiles (Geneva, 9 February 1962 and 15 June 1970) and the Convention on International Trade in Textiles (Geneva, 20 December 1973) sought to resolve the problem of the natural predominance of developing countries in the production of cotton textiles at that time. Finally, in 1974, the multifibre arrangement was concluded. In any system where quotas are set for individual exporting countries, exporters could attempt to circumvent quotas by shipping products through third countries or by making false declarations about the country of origin of the products. The agreement contained provisions to deal with such cases. The number of signatories to the agreement changed slightly over time, but was generally over 40, with the EC counting as a single signatory. Trade between these countries dominated world trade in clothing and textiles, accounting for up to 80%. The products covered by GATT rules in each of the first three stages were to cover the four main types of textiles and clothing: lace and yarn; fabrics; ready-to-use textile products; and clothing. All other restrictions that were not covered by the Multifibre Arrangement and that were not in conformity with the WTO Regular Agreements before 1996 had to be adapted or phased out by 2005. The agreement provided for special treatment for certain categories of countries, for example. B new entrants, small suppliers and least developed countries. A textile monitoring body (TMB) monitored the implementation of the agreements. It consisted of a Chairman and 10 members acting in their personal capacity.

It monitored the measures taken under the agreement to ensure that they were consistent and reported to the Goods Council, which reviewed the implementation of the agreement before each new stage of the integration process. The Textiles Surveillance Body has also dealt with disputes under the Agreement on Textiles and Clothing. If not resolved, disputes could be referred to the WTO`s regular dispute settlement body. When the Agreement on Textiles and Clothing expired on 1 January 2005, the Textile Observatory also ceased to exist. The AMF was a multilateral agreement signed in 1974, but its roots go back to the 1930s. At that time, at a time of global economic difficulties, Japan became the largest exporter of cotton textiles, and the United States and Europe began to limit imports from Japan in order to preserve their domestic markets for their own textile industry. These restrictions have never really disappeared. In the 1960s, they were extended to Hong Kong, Pakistan and India. As restrictions on textile trade became globalized, multilateral negotiations followed, leading to a series of agreements. Initially, the agreements only covered cotton, but they eventually expanded to “multifibre” agreements that covered textiles and clothing made from all fibers: cotton accounts for about 38% of global fiber consumption. Under the Multifibre Arrangement, exports from developing countries were subject to quotas.

Each country was allocated a certain number of authorized exports for each item. Only a certain percentage of the goods were allowed to be imported into each developed country per year. Once this quota was reached, the country could no longer export goods until the following calendar year. After the end of the multifibre agreement, China experienced a sharp increase in exports. The US and the EU have called on the country to restrict trade as outlined in their accession agreement with the WTO. This has led to quota restrictions for a certain period of years between the US and the EU. Products of the textile industry were covered by the multifibre arrangement. Specific products included yarn, fabric and clothing. These particular industries have been targeted because they are labour-intensive. Where developing countries tend to have an advantage in these industries because of their high population and low wages of workers.

If further claims arose for the industry during the transition, the agreement allowed for the temporary imposition of additional restrictions under strict conditions. These transitional safeguards were not in line with the safeguard measures normally permitted under gatt, as they can be applied to imports from certain exporting countries. But the importing country had to prove that its domestic industry was suffering serious damage or was threatened with serious damage. And it had to demonstrate that the injury was due to two things: an increase in imports of the product in question from all sources and a sharp and significant increase in the respective exporting country. The safeguard clause could be implemented either by mutual agreement after consultation or unilaterally. It has been inspected by the Textiles Surveillance Authority. The Multifibre Arrangement (MFA) was an international trade agreement on textiles and clothing that existed from 1974 to 2004. It has set quotas for the volume of exports of clothing and textiles from developing countries to industrialized countries.

Textile and clothing products were returned to GATT rules over a period of 10 years. This was done gradually in four stages to give importers and exporters time to adapt to the new situation. Some of these products were previously subject to quotas. On the 31st. The quotas in force in December 1994 have been incorporated into the new agreement. For products subject to quotas, integration into GATT has resulted in the abolition of these quotas. China`s quota for cotton trouser exports to the United States in 2004 was about double that of India – 2 million dozen pairs – reflecting the rapid growth of the Chinese industry at the time of the crystallization of the MFA`s restrictions on this product. But China accounted for only 1% of U.S.

imports of cotton pants. China accounted for about 25% of world textile and apparel exports in 2004, and with the end of the MFA, this is expected to continue to increase. But when China began realigning its economy in 1979, its textile industry, like India`s, was oriented towards the domestic market. Exports have begun to rise sharply. In September 1980, China and the United States negotiated their first bilateral textile agreement. China`s quota of cotton pants has remained essentially fixed since the early 1980s, while China`s textile industry has become the largest in the world by moving to other products and markets. Like NAFTA and the IWC, the African Growth and Opportunity Act (AGOA) of 2000 granted low-income African countries preferential access as a form of economic assistance. This agreement allowed Kenya to export Lesotho and more than 30 other African countries, cotton pants and other products to the United States outside the AMF quota system. The adoption of AGOA has attracted investment and expertise – mainly from Asian companies – in the textile and apparel sector of these countries. Kenya`s cotton pants exports to the United States increased from 287,000 dozen pairs in 1998 to 3.1 million in 2004, and Kenya accounted for 2 percent of U.S. imports, twice as many as China. In this way, the MFA has indirectly encouraged the production of clothing in new corners of the world.

In the 1970s, Hong Kong companies transferred resources to Mauritius when quota restrictions became binding. In the 1980s, South Korean entrepreneurs began investing in Bangladesh. The end of the quota system has removed some of the investment incentives in a number of these countries, and their economies must adapt to lower levels of clothing exports and employment. The AMF focused on a series of bilateral agreements between importers from developed countries such as the United States and exporters from developing countries such as China and Bangladesh. .