Agreement
on Textiles and Clothing
Introduction
The
Multifibre Arrangement (MFA) has been in force for 20 years under
a derogation from the basic principle of non-discrimination of GATT.
During this period, MFA quotas have been applied almost exclusively
to exports of developing countries.
The
Agreement on Textiles and Clothing has been generally recognized as
an important achievement for developing countries because it establishes
a process for the progressive re-integration of these trades into
GATT rules during a ten-year, three-stage transitional period.
Concurrent
with this integration process there will be a programme for liberalizing
existing quotas; the quotas carried over from the former MFA on products
not yet integrated will be progressively expanded so that their trade-restrictive
effect is reduced. Also, other restrictions on textiles and clothing,
not consistent with GATT, must be either brought into conformity with
the rules or phased out.
The
Agreement provides for a special transitional safeguard mechanism,
which applies to any product not yet integrated into GATT and not
already under restraint if, because of an import surge, there should
be serious damage or actual threat thereof to the domestic industry.
To
ensure transparency and the proper functioning of the Agreement, a
Textiles Monitoring Body comprising a Chairman and ten Members will
supervise all aspects of its operation, report at regular intervals
and deal with dispute settlement matters.
There
are also provisions to deal with instances of circumvention of quotas
by transhipment, re-routing, false declaration of country or place
of origin, or falsification of official documents.
At
the end of the transitional period, the era of discriminatory, bilateral
quota measures will have ceased, and only normal GATT rules, as strengthened
in the Uruguay Round, will apply.
Recognition
of Interests
Preamble
The
Preamble recalls that least-developed countries should be accorded special
treatment.
Article
1:2, 3, 4 and Footnote 1
This
Article refers to three categories of Members which should receive
treatment better than the norms otherwise prescribed in the Agreement:
-
Paragraph 2 reinforces the provisions of Articles 2:18 and 6:6(b)
by emphasizing that small suppliers must be given meaningful increases
in access possibilities, while new entrants to trade in this sector
must be allowed to develop commercially significant trading opportunities.
A footnote to this paragraph urges that exports from least-developed
Members, to the extent possible, also benefit from such increased
access.
-
Paragraph 3 recognizes that, Members who did not participate in MFA
IV warrant special treatment, reflected in the time periods for making
notifications.
-
Paragraph 4 recognizes that cotton producing exporting Members have
particular interests which should be reflected, in consultation with
them, in the implementation of the Agreement.
Article
2:18
Small
exporters who are subject to MFA quotas and whose restrictions in volume
terms are 1.2 per cent , or less, of total restrictions in an importing
Member as of 31 December 1991, move ahead one stage in the access growth
process (or an equivalent benefit by mutual agreement). In other words,
such Members will benefit from the growth factor of 25 per cent as from
the first year of operation, and 27 per cent as of the fourth year (instead
of 16 per cent , 25 per cent and 27 per cent in the 3-4-3 year periods).
Article
6:6
The
transitional safeguard lists three categories of exporters, and one
particular form of trade, which are to be given consideration beyond
the norms set out in Article 6:
-
Paragraph 6(a) singles out the least-developed countries for significantly
more favourable treatment than that provided in that Article for small
suppliers, wool producing exporting countries and countries having
a significant proportion of their trade in outward processing. This
more favourable treatment should be preferably with respect to all
the elements of the Article, but at least in overall terms.
-
Paragraph 6(b) recognizes the needs of small suppliers through provision
for more favourable treatment in the application of quota base levels,
growth rates and flexibility. It also recognises the need to take
into account the future possibilities for the development of their
trade and to allow commercial quantities of imports from them.
-
Paragraph 6(c) highlights the special situation of developing country
Members which are comparatively small textiles and clothing exporters,
whose economies are dependent on the wool sector, and whose trade
in textiles and clothing consists almost exclusively of wool products.
Their export needs will be given special consideration when applying
the safeguard in terms of the quota levels, growth rates and flexibility.
-
Paragraph 6(d) provides that for Members having a significant portion
of their exports in outward processing trade, more favourable treatment
is to be given to such trade.
List
of Products Covered by this Agreement: Annex, paragraph 3
Transitional
safeguard actions cannot be taken against exports of handloom fabrics
from developing country Members; hand-made cottage industry products
or folklore handicrafts when properly certified; historically traded
products such as bags, sacks, etc. from jute and some other fibres;
and pure silk products. Any safeguard action taken in respect of such
products (of interest to developing countries) will be based on Article
XIX of GATT 1994.
Implementation
Period |
