What Do You Mean By Multi Fiber Agreement

The agreement was concluded for the first time under the General Agreement on Tariffs and Trade (GATT). Origins (1) recognized both the threat to developed markets of imports of cheap clothing and textiles in terms of market disruptions and the impact on their own producers, and (2) the importance of such exports to developing countries for their own economic development and as a means of diversifying export earnings. There were a few exceptions in the multifibre setting. Very poor countries such as Bangladesh have not been restricted, as quotas would seriously harm the well-being of the nation. Countries with this advantage were able to expand their industries to such a level that the new competition resulting from the end of MACROfinancière aid did not appear to them to be detrimental, as they continued to have a cheaper workforce. The agreement provided for special treatment for certain categories of countries, for example. B for new entrants, small suppliers and least developed countries. The EU`s approach to dealing with this development was somewhat different from that of the United States. This has been complicated by the fact that the decisions of the European Commission are based on a form of consensus among its Member States, which must individually ratify exceptional measures to limit imports from a given country. However, European countries have different interests in the textile sector, with some southern countries having long-established domestic manufacturing industries (including Spain and Italy), while some of Europe`s „central“ and „northern“ countries have powerful multinational retail sectors. Retailers preferred unrestricted trade developments (and thus unrestricted growth and undying import opportunities), while countries that have adopted domestic manufacturing are in favour of a more orderly evolution of imports that would not compromise domestic producers.

Following a significant increase in imports from China, the European Commission and China held bilateral consultations under Article 242 in June 2005. Once again, the parties to the negotiations have opted for a bilateral approach and not for a more elaborate process, in which the WTO is directly involved. The resulting declaration of intent dealt with ten product categories that threatened „the orderly development of trade under Article 242“ of China`s WTO accession agreement and the corresponding legislation previously adopted by the European Commission. These consisted of categories 2 (cotton fabrics), 4 (t-shirts), 5 (pulls), 6 (pants), 7 (blouses), 20 (literie), 26 (clothes), 31 (brassières), 39 (table and kitchen linen) and 115 (linen or ramie thread). The EU and China softly approved specific quantitative limits for 2005 in the ten categories mentioned above.