ASSIGNMENT

Assignment



Assignment

INTRODUCTION

Besides agriculture, textiles and clothing is only industry that has the separate agreement, independent, multilateral, negotiated under auspices of WTO. This is not surprising considering important part of textiles and clothing in basket of international trade in many, especially developing countries.

India's textile and clothing industry accounts for nearly 4% of national GDP and 20% of value added manufacturing. It also earns the third of India's foreign exchange and employs more than 6.5 million people directly and indirectly. Industry is most important India, after agriculture.

International trade in textiles and clothing is changing significantly due to phasing out of MFA (MFA) era, and ushering in era of free trade in shares. This has shaken whole pattern of world trade in textiles and clothing from years of lethargy, and each country or region has suddenly become busy preparing their own national and regional strategy for competitiveness in new scheme of world trade.

Agreement on Textiles and Clothing (ATC) remains main engine of an earthquake as economic giant in this sector.

BRIEF HISTORY BACKDROP

International trade in textiles and clothing is an exception with aim of classic GATT1 - promoting global trade liberalization - throughout its history. After end of World War II, restrictions on cotton textiles was implemented in voluntary export restrictions. In the GATT Ministerial meeting in November 1959, USASecretary of Treasury noted that sharp increases in imports over the short period of time could have serious economic, social and political in importing country.

With commendable speed, Agreement of cotton in short term (STA) was completed at behest of U.S. early in 1961 for one year. Textiles came to be recognized by GATT as the "special case". STA was followed by Long-Term Agreement (LTA), which was in force from 1962 to 1973, which, in turn, was followed by Agreement on International Trade in Textiles, better known as Multi-Fibre Agreement (MFA). This was in force on 1 January 1974 to December 31, 1919 942. These side agreements for sector, rules and disciplines of Article XI (General Elimination of Quantitative Restrictions), XIII (non-discriminatory application of quantitative restrictions) and XIX (Emergency Action on Imports of Particular Products) principle of most favored nation treatment (MFN) was thrown out window.

While regime began by restricting only cotton goods, extending its tentacles to wool and man-made fibers, and in 1986, virtually every fiber of existence. At same time, several countries subject to quotas became addicted to them, and share traders emerged as the lobby often more powerful than manufacturers themselves. India's textile and clothing industry is one example.

Therefore, if meaningful trade liberalization is achieved in UR3, AMF (recognized as an exception to GATT) had to go, and rules for industrial products had to be extended to textiles and clothing. It is against this backdrop that Agreement on Textiles and Clothing (ATC) assumes significance.

Specifically, ATC has some definite advantages over age of MFA, viz.,

It puts an end to long duration of MFA.

It provides textiles and apparel on par with all industrial products, and sector remains the special ...