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p. 28 of 40 BACK | NEXT The WTO Tariff Concessions Non-Discrimination Principles Non-Tariff Barriers to Trade Services Trade-Related Aspects of Intellectual Property Rights Textiles and Clothing Elimination of Quotas Expansion of Remaining Quotas Safeguards Agriculture Trade Remedies Dispute Settlement System Regional Arrangements WTO Application Process

World Trade Organization Toolkit

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Textiles and Clothing

Originally, textiles and clothing was de facto not included in the GATT regime. That sector has long been governed by specific regimes outside the scope of the GATT, first by the Cotton Arrangement (1961-1974) and then by the Multifibre Arrangement (1974-1994) (hereinafter the 'MFA').

Under the MFA, textile and clothing quotas were negotiated bilaterally. This Arrangement provided for the application of selective quantitative restrictions when surges in imports of particular products caused, or threatened to cause, serious damage to the industry of the importing country. The MFA set out a framework within which bilateral agreements for Voluntary Export Restraints (VERs) could be negotiated with developing country suppliers. The MFA was a major departure from the basic GATT rules and, in particular, from the principle of non-discrimination.

The objective of the Agreement on Textiles and Clothing ("ATC"), which was negotiated during the Uruguay Round, is to progressively bring textiles and clothing into the framework of the GATT, in other words, to eliminate quotas. It does not in itself include substantive provisions (e.g. providing for reduction in tariffs). The ATC is rather a transitional agreement aimed at placing textile and clothing products under the GATT, with a view to eliminating quotas. The ATC is thus intended to disappear, after which textiles and clothing would be entirely integrated within the GATT.

The Agreement provides for the following:

Elimination of quotas: WTO Members that maintain import quotas in textiles and clothing must progressively integrate the products concerned into the body of the GATT rules over a 10-year period. This process has to be carried out progressively in four stages with all products being integrated at the end of the 10-year period. At the end of the 10-year period, i.e. on 1 January 2005, there will be no more quotas on textiles and clothing products.

• Learn more about the elimination of quotas

Expansion of remaining quotas: Concurrent with this integration process, there is a program for liberalising the existing restrictions, that is, for enlarging the bilateral quotas carried over from the former MFA until such time as the products are integrated into GATT, at which time the quotas terminate. Under this system, quotas are eliminated either when the products concerned are integrated into GATT at one of the stages or at the end of the transition on 1 January 2005. The level of each restriction under MFA bilateral agreements in force during 1994 must be increased annually by the following amounts over the MFA rate: 1995-1997: 16%; 1998-2000: 25%; 2002-2005: 27%.

• Learn more about the expansion of remaining quotas

Safeguards: special safeguard provisions apply with respect to the liberalisation of MFA-based and bilaterally-negotiated restrictions. Under Article 6 of the ATC, Members may apply safeguards against products that are not already subject to restrictions when imported from the targeted Member. The criteria used in this provision are similar to those found in the rules on anti-dumping and countervailing measures.

• Learn more about safeguards

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