Textiles Beyond the MFA Phase-Out

Abstract

The Uruguay Round (UR) Agreement on Textiles and Clothing (ATC), which was meant to undo the MFA, is to be effected by the year 2005 despite inherent tendencies in the past to continually protect textile and clothing (T&C) industries. How did we get into this protectionist quagmire? What lay behind being able to sell protection in importing countries to T&C exporting countries? What pattern of T&C trade has hence evolved and what are the implications thereof? Based on this background the paper analyzes what currently influences where we now are four years after the UR ratification. Aside from tariffs and non-tariff barriers, major influences include regional trade agreements, changing locational demands, normal development trends and shifting factor intensities of production. It is then cautiously concluded that, despite backloading liberalization and factors which increase the pressure from major T&C exporting countries, the wrapping up of the ATC by Jan. 1st., 2005, will be basically abided by, even if it is accompanied by some sidestepping and perhaps postponements.