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Balanced Ethical Fashion Forum's view with an alternative - a fair thing to do given that they are a trade body of consultants and an ad agency called Futerra
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<ref name=undefined /> The '''Multi Fibre Arrangement''' (MFA) governed the world trade in [[textiles]] and garments from 1974 through 2004, imposing [[wiktionary:quota|quota]]s on the amount [[developing country|developing countries]] could [[export]] to [[developed country|developed countries]]. It expired on 1 January 2005.
<ref name=undefined /> The '''Multi Fibre Arrangement''' (MFA) governed the world trade in [[textiles]] and garments from 1974 through 2004, imposing [[wiktionary:quota|quota]]s on the amount [[developing country|developing countries]] could [[export]] to [[developed country|developed countries]]. It expired on 1 January 2005.


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 have an [[absolute advantage]] in textile production because it is labor-intensive and they have 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://www.itcb.org/Documents/ITCB-MI35.pdf</ref>
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|accessdate=17 December 2015}}</ref> have an [[absolute advantage]] in textile production because it is labor-intensive and they have 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://www.itcb.org/Documents/ITCB-MI35.pdf</ref>


However, 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 there.{{citation needed|date=November 2014}}
However, 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 there.{{citation needed|date=November 2014}}

Revision as of 11:05, 17 December 2015

[1] The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries. It expired on 1 January 2005.

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[2] have an absolute advantage in textile production because it is labor-intensive and they have low labor costs.{[3] 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.[4]

However, 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 there.[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 remain 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.[5]

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

References

  1. ^ Cite error: The named reference undefined was invoked but never defined (see the help page).
  2. ^ "Ethical Fashion Forum: alternative trade page". PlanB4fashion. Retrieved 17 December 2015.
  3. ^ "Trade, Tariffs and Barriers". Ethical Fashion Forum. Retrieved 13 September 2015.
  4. ^ 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
  5. ^ 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
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