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{{Short description|Former system of textile export quotas}}
{{Short description|Former system of textile export quotas}}
{{ref improve|date=April 2024}}
The '''Multi Fibre Arrangement''' (MFA) governed the world trade in [[textiles]] and garments from 1974 through 1994, imposing [[wiktionary:quota|quota]]s on the amount [[developing country|developing countries]] could [[export]] to [[developed country|developed countries]]. Its successor, the [[Agreement on Textiles and Clothing (ATC)]], expired on 1 January 2005.
The '''Multi Fibre Arrangement''' (MFA) governed the world trade in [[textiles]] and garments from 1974 through 1994, imposing [[wiktionary:quota|quota]]s on the amount [[developing country|developing countries]] could [[export]] to [[developed country|developed countries]]. Its successor, the [[Agreement on Textiles and Clothing (ATC)]], expired on 1 January 2005.


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{{see also|History of cotton}}
{{see also|History of cotton}}


Since the (re)emergence of developing countries as a source of cotton textile production, after the [[industrial revolution|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 [[Decolonization|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.
Since the (re)emergence of developing countries as a source of cotton textiles, production from these countries steadily increased after [[Decolonization|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) established trade rules in textiles. Eventually, the Multi Fibre Agreement was established in 1974.


==Impact==
==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.
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<ref>{{cite web|title=Ethical Fashion Forum: alternative trade page |url=http://planb4fashion.blogspot.com/2015/12/ethical-fashion-forum-alternative-trade.html|website=PlanB4fashion|date=16 December 2015 |accessdate=17 December 2015}}</ref> have a [[comparative advantage]] in textile production because it is labor-intensive and their poor social insurance systems allow them low labor costs.<ref>{{cite web|title=Trade, Tariffs and Barriers |url=http://www.ethicalfashionforum.com/the-issues/trade-tariffs-and-barriers|website=Ethical Fashion Forum|accessdate=13 September 2015}}</ref> 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.<ref>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://trade.ec.europa.eu/doclib/html/123176.htm http://www.itcb.org/Documents/ITCB-MI35.pdf] {{Webarchive|url=https://web.archive.org/web/20161227105256/http://trade.ec.europa.eu/doclib/html/123176.htm|date=2016-12-27}}</ref> 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|date=November 2014}}


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|date=November 2014}}
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|date=November 2014}}


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.<ref>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.html</ref>
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.<ref>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.html</ref>

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|date=November 2014}}

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|date=November 2014}} 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==
==See also==

Latest revision as of 02:24, 20 April 2024

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.

History

[edit]
See also: History of cotton

Since the (re)emergence of developing countries as a source of cotton textiles, 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) established trade rules in textiles. Eventually, the Multi Fibre Agreement was established in 1974.

Impact

[edit]

The MFA was introduced in 1974 as a short-term measure intended to allow developed countries to adjust to imports from the developing world.

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.[1]

See also

[edit]

References

[edit]
  1. ^ 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.html
[edit]
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