Until the end of the Uruguay Round, textile and clothing quotas were the subject of bilateral negotiations and were governed according to the rules of the Multifibre Agreement (MFA). This is the application of selective quantitative restrictions when an increase in imports of certain products causes or threatens to cause serious harm to the industry of the importing country. The multi-fibre regime was a significant departure from the basic rules of the GATT and, in particular, the principle of non-discrimination. On 1 January 1995, it was replaced by the WTO agreement on textiles and clothing, which provides for a transition process for the final abolition of these quotas. 9. Finally, I would like to say that the gradual introduction of quotas has led to a flood of activities aimed at curbing the natural development of free trade. As expected, the planned abolition of quotas, in accordance with the provisions of the final phase of the ATC, had the most profound effects. While the ATC`s conclusion can be considered one of the few agreements under the WTO banner, which has (for the most part) followed its course according to an agreed framework and timetable, it has also resulted in an exceptional number of real and not yet visible measures to counteract its effects. The European Union and the United States, which are the main beneficiaries and the original architects of textile and clothing quotas, have acted quickly to counter the effects of increased imports, particularly from China. While the EU`s approach is likely based on a bilateral consensus with China rather than that of the United States, the results are relatively similar. Many of the product categories that were originally protected by quantitative restrictions are again enjoying similar protection. For both the EU and the United States, safeguards have halted some imports from China for the remainder of the year, and further restrictions are likely over the next three to four years. While the EU has negotiated an agreement with its Chinese partners on “orderly import growth” over the next three years, with growth rates set, US safeguards expire at the end of 2005, but are already being extended.
More than any other country, China has been by far the main source of increased imports, becoming the main focus on new quantitative restrictions.