Textile and Apparel Trade After the Multifiber Arrangement

Although Multifiber Arrangement (MFA) quotas have been completely phased out, other policy instruments, such as tariffs and preferential agreements, still affect the market. Global tariffs on textiles and apparel remain significantly higher than for most other manufactured products. Nontariff trade barriers are also a factor, including anti-dumping duties, import "rules of origin," safeguards, elaborate custom procedures, stringent labeling requirements, and outright bans on apparel imports. Countries with preferential market access typically pay lower tariffs, which will also influence production and trade.

China-specific safeguard provisions were established in the 2001 World Trade Organization (WTO)-China Accession Agreement. These provisions were designed to reduce market disruption and protect WTO members from surges in Chinese imports that would impede the "orderly development of trade." Two types of China-specific safeguards were identified in the accession protocol, namely special-textile and the transitional, product-specific safeguards. The requirements for imposing China-specific safeguards are much less stringent than the "general safeguards" specified in the WTO Agreement on Safeguards (Liu and Laixiang). Unlike WTO general safeguards, China-specific safeguards can be levied by a WTO member given the threat of market disruption. No governmental investigation is required prior to imposition nor is it necessary to establish a causal link between increased import quantities and "serious damage."

For More Information

  • Huan Liu and Laixiang Sun, "Beyond Phase-out of Quotas in Textile and Clothing Trading: WTO-Plus Rules and the Case of U.S. Safeguards against Chinese Exports in 2003," Asian-Pacific Development Journal, Vol. 11, pp. 49-71, June 2004.
  • See WTO topic area and its chapter Agreement on Agriculture and Beyond.