International Trade and Pakistan
CHAPTER ONE: INTRODUCTION
Clothing is one of life’s necessities, a part of our lives, something we cannot do without. Therefore, a new trade policy that lowers clothing prices, making much more variety accessible to the consumers, directly affects us all. Such a change took place at the beginning of 2005. The developed world, or more specifically, the U.S., Canada, and the European Union (EU) discontinued most of their limits on imports of yarn, fabric, and clothing from developing countries. These quantitative restrictions were undertaken with the inception of the Multi-fiber Arrangement in 1974. Previously there had been earlier arrangements against developing country exports but they were mostly specified for cotton goods. However, under this Arrangement, trade in textiles—that is, yarn, fabric—and clothing, all were managed through quotas. In 1995, under a new agreement formally known as the Agreement on Textiles and Clothing (ATC), it was decided to incorporate this system of quotas into the aegis of the WTO. January 1, 2005, was a big hallmark in the sense that it marked the end of a 10-year phase-out of the MFA quotas.
This step was much celebrated by the developing world basically, because of the significance of this highly important sector regarding the overall export portfolio of these countries. The Textile and Clothing (T&C) sector accounts for US $370 billion in world exports, almost 8% of the total world trade in manufactured goods.[1] Being labor intensive, the industry offers developing countries an alternative to advance early stages of industrialization with high potential of employment generation and export expansion. T&C exports account for more than 70 % of total exports in Bangladesh and Pakistan, 50% in Sri Lanka and around 25% in India and China.[2] This surely gives a very apt reason why any policy changes related to this sector hold such significance.
All the years that the MFA was operating, it was unanimously agreed that it was a
Clothing is one of life’s necessities, a part of our lives, something we cannot do without. Therefore, a new trade policy that lowers clothing prices, making much more variety accessible to the consumers, directly affects us all. Such a change took place at the beginning of 2005. The developed world, or more specifically, the U.S., Canada, and the European Union (EU) discontinued most of their limits on imports of yarn, fabric, and clothing from developing countries. These quantitative restrictions were undertaken with the inception of the Multi-fiber Arrangement in 1974. Previously there had been earlier arrangements against developing country exports but they were mostly specified for cotton goods. However, under this Arrangement, trade in textiles—that is, yarn, fabric—and clothing, all were managed through quotas. In 1995, under a new agreement formally known as the Agreement on Textiles and Clothing (ATC), it was decided to incorporate this system of quotas into the aegis of the WTO. January 1, 2005, was a big hallmark in the sense that it marked the end of a 10-year phase-out of the MFA quotas.
This step was much celebrated by the developing world basically, because of the significance of this highly important sector regarding the overall export portfolio of these countries. The Textile and Clothing (T&C) sector accounts for US $370 billion in world exports, almost 8% of the total world trade in manufactured goods.[1] Being labor intensive, the industry offers developing countries an alternative to advance early stages of industrialization with high potential of employment generation and export expansion. T&C exports account for more than 70 % of total exports in Bangladesh and Pakistan, 50% in Sri Lanka and around 25% in India and China.[2] This surely gives a very apt reason why any policy changes related to this sector hold such significance.
All the years that the MFA was operating, it was unanimously agreed that it was a