The End Of Mfa
...(MFA) starkly illustrates the human development threats posed by the loss of preferences. Under the WTO Agreement on Textiles and Clothing, drawn up in 1994, all textile and clothing quotas maintained by industrial countries under the MFA have been phased out. Some momentous changes are coming in the global textile and clothing industry. At the end of 2004, a system of quotas that regulates trade between rich and poor countries comes to an end. The changes are the final stage in a ten year phasing out of long standing restrictions in the textiles trade. Some of those inroads can best be seen at the retail end of the sector.As the last quotas are withdrawn, the shake-up in the $350 billion textile and clothing market produce winners and losers. Impoverished female workers, who make up two-thirds of the global labour force in this sector, are the biggest losers.
The elimination of quotas has changed the global clothing industry forever, raising the bar for suppliers. The facilities that were needed to compete in the industry before January 2005 are no longer sufficient. The ability to ship a decent garment, on time every time and at a competitive price, is no longer an asset. It has become the entry level requirement.
Developing countries have a natural advantage in textile production because it is labour intensive and they have low labour costs. According to a World Bank/IMF study, the system has cost the developing world 27 million jobs and $40 billion a year in lost exports.However, the Arrangement was not negative for all developing countries. For example the EU imposed no restrictions or duties on imports from the very poorest countries, such as Bangladesh, leading to a massive expansion of the industry there.
Most of the countries losing there market share because until 31 December 2004, the WTO agreement on Textile and Clothing and its predecessor, the...
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