Multi-Fibre Arrangement

Multi-Fibre Arrangement

An expired international agreement that set quotas on the textiles and clothing developing countries could export to developed countries. The purpose behind the Multi-Fibre Arrangement was to allow developed countries time to adjust to competition from developing countries, which could produce the same textile products much more cheaply. It was thought that developing countries could flood the markets in developed countries with less expensive textiles, which would have had a negative effect on the developed countries' economies. Critics of the Arrangement argued this hampered development. It was in effect from 1974 through the end of 2004. It is formally called the Agreement on Textile and Clothing. See also: World Trade Organization.

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Multi-Fibre Arrangement (MFA)

a trade pact between some 80 developed and DEVELOPING COUNTRIES, introduced in 1974, that regulates INTERNATIONAL TRADE in textiles and clothing through the use of QUOTAS on imports. Its purpose is to give poor countries guaranteed and growing access to markets in Europe and North America but at the same time to ensure this growth does not disrupt the older established textile clothing industries of the developed countries.

The MFA is a form of PROTECTIONISM that discriminates against the interests of the less developed countries, many of which are highly dependent on the textile industries as a leading sector in promoting their ECONOMIC DEVELOPMENT; it is contrary to the principles of the WORLD TRADE ORGANIZATION but has been conveniently ‘exempted’ from that body's rules of good conduct. Under an agreement reached in the ‘Uruguay Round’ of negotiations, however, the MFA was phased out in 2005.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005