Textile quotas authorized under the World Trade Organization (WTO) Agreement on Textiles and Clothing (ATC) are scheduled to end in January 2005. The WTO web site has background here:
"From 1974 until the end of the Uruguay Round, the trade was governed by the Multifibre Arrangement (MFA). This was a framework for bilateral agreements or unilateral actions that established quotas limiting imports into countries whose domestic industries were facing serious damage from rapidly increasing imports. The quotas were the most visible feature. They conflicted with GATT?s general preference for customs tariffs instead of measures that restrict quantities. They were also exceptions to the GATT principle of treating all trading partners equally because they specified how much the importing country was going to accept from individual exporting countries. Since 1995, the WTO?s Agreement on Textiles and Clothing (ATC) has taken over from the Mulltifibre Arrangement. By 1 January 2005, the sector is to be fully integrated into normal GATT rules. In particular, the quotas will come to an end, and importing countries will no longer be able to discriminate between exporters. The Agreement on Textiles and Clothing will itself no longer exist: it?s the only WTO agreement that has self-destruction built in..."
Link to the page itself for more. The WTO has more on the agreement on this page.
The end of the quotas creates opportunities for some developing countries, and threatens others. Some developing countries are given special access to developed markets as a form of foreign aid or as the by-product of a bilateral agreement. These countries will lose this advantage as barriers are reduced for everyone else. Mauritius, for one, is concerned, as this article from the weekly trade newsletter Bridges indicates: "Mauritius Calls For WTO Meeting on Textile Quota Phase-out"
"Mauritius sent a letter to WTO Members on 20 July, calling for a meeting to discuss the impeding phase-out of textile quotas at the end of the year. Textiles coalitions have been calling for an emergency meeting, but only a WTO Member government can make the move (see BRIDGES Weekly, 23 June 2004). According to trade sources, Mauritius would like to see the meeting focus on vulnerable countries in sub-Saharan Africa. A number of developing countries that currently enjoy preferential access to developed country markets, through schemes such as the US African Growth and Opportunity Act (AGOA), fear they will loose all access after quotas are lifted and more competitive producers, such as China and India, pick up large market shares. These small and vulnerable economies are concerned that the development gains that their infant textile industries have allowed them to make will be lost and the industries devastated. The EC recently reviewed its preference schemes in light of the upcoming quota phase-out (see BRIDGES Weekly, 14 July 2004). "Mauritius Requests WTO Meeting To Discuss Textile Quota Elimination," WTO REPORTER, 21 July 2004."
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