The agreement on textiles and clothing

Abstract

The General Agreement on Tariffs and Trade (GATT) reduced industrial tariffs but failed to eliminate non-tariff barriers like the Multi-Fibre Arrangement (MFA), which allowed developed countries to impose discriminatory quotas on textiles and clothing from developing nations. The 1995 WTO Agreement on Textiles and Clothing (ATC) sought to phase out these quotas over ten years, integrating the sector into GATT/WTO rules by January 2005. The ATC mandated progressive liberalization in four stages, requiring members to remove restrictions on increasing shares (16% to 49%) of their 1990 import volumes. Post-2005, remaining restrictions became illegal unless justified under non-discriminatory safeguard measures (e.g., proven injury to domestic industries). While the MFA’s bilateral quotas and unilateral measures (covering 90+ agreements by 1994) legally contravened GATT principles, the ATC aimed to normalize textile trade under global rules, ending decades of managed trade. Challenges persisted in ensuring compliance and equitable integration.