Multi-Fibre Arrangement

(redirected from Agreement on Textile and Clothing)

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
References in periodicals archive ?
Trade in textile and clothing sector has been subject to quota restrictions from importing countries (EU and USA etc) during period 1974-1994 in the form of bilateral trade agreement Multi Fiber Agreement (MFA) and then Agreement on Textile and Clothing (ATC).2 Due to the devastating effects of restriction of MFA, it was decided in Uruguay Round (UR) 1994 to bring trade in textile and clothing sector under General Agreement on Tariffs and Trade (GATT) rules.
Previously, many were units of Hong-Kong based companies, which have closed left the market, since the liberalisation of the World Trade Organisation's (WTO) agreement on textile and clothing at the end of 2004.
The WTO Agreement on Textile and Clothing (ATC), which established a ten-year period for phasing out quotas, will expire on December 31, 2004.
AN ATTACK has been made on the United States, European Union (EU), and other textile importing jurisdictions for waiting until the last minute to abolish most restrictive quotas under the World Trade Organisation's (WTO) Agreement on Textile and Clothing. A note from International Textiles and Clothing Bureau (ITCB) exporting countries said: "It may be noted that the large bulk of quotas have been kept to be abolished only on the last day of the agreement (January 1, 2005).

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