Agreement on Textiles and

Clothing

1961 - short-term
Arrangement regarding
International Trade in Cotton
Textiles,
1962 - the long-term Cotton
Textiles Arrangement (19621973).
The Arrangement regarding
International Trade in Textiles
or MFA entered into force in
1974, extending the coverage
of the restrictions on textiles
and clothing from cotton
products to include wool and
From 1974 till the end of the Uruguay Round, the trade was
man-made fiber products (and
governed by MFA. This was the framework for bilateral agreements
from 1986, certain vegetable
between the importing nation and the exporting nation. In other
fiber products).
cases MFA was a unilateral action that established quotas limiting
imports into countries whose domestic industries were facing
serious damage from rapidly increasing imports.

Integration of Textiles and

Clothing into GATT under the ATC
Minimum
volume
integrated a
(Per cent)

Accumulated
volume
integrated
(Per cent)

Growth rate of
remaining quotas
(Per cent)

1 January 1995
(Stage I)

16

16

16

1 January 1998
(Stage II)

17

33

25

1 January 2002
(Stage III)

18

51

27

1 January 2005
(Full integration)

49

100

Date

Growth on Growth Rates under ATC

Stage
of
MFA

Ist

2nd

3rd

Year

MFA
Growth
Rate

Annual level
after MFA
Growth Rate
@ 6%

1994

6%

1000

1995

6%

1060

Growth
on
Growth
Rates

ATC Growth Annual level

Rate after
after ATC
Growth on Growth
Rate
Growth
6.00%

16%

6.96%
(6%x16%)

1000
1069

1996

1123

1144

1997

1191

1223

1998

6%

1262

25%

8.7%
(6.96%x25%)

1330

1999

1338

1445

2000

1418

1571

2001

1503

1708

2002

6%

1593

27%

11.05%
(8.7%x27%)

1897

Flexibilities under the Agreement on

Textiles and Clothing
The bilateral agreements finalized under the MFA had certain
flexibilities or facilities for enhancing a restraint level by
reducing another restraint level. Such flexibilities operated
under the MFA bilateral agreements had migrated to the ATC
with practically no change. The regular flexibilities were:
Carry Over: If a portion of the restraint level remained
unutilized at the end of the quota year, it could be carried over
to the following years restraint level for the same product
category, subject to a specified percentage.
Carry Forward: A portion of the following years restraint level
could be advanced to that of the current year for the same
product category, subject to a specified percentage.
Swing: If a portion of the restraint level for the current year
could be swung or shifted to the restraint level for another
product category for the current year, subject to a specified
percentage. The swing could be availed of only if there is a
balance to spare in the eligible donor category.