Fashion Marketing: Contemporary Issues, Second edition - Pr School

Globalization: global markets and global supplies 7
increase. Indian cotton exports are predicted to grow from US $12 billion in
2005 to about US $40 billion by 2010. Indigenous experts are critical of the
optimistic estimates and point to the threat of China’s increasingly dominant
position in world markets. Although they agree that there will be growth they
argue that India must develop its logistics capability if it is to compete against
China. This requires significant public investment in the road, rail and other
transport infrastructure. Pakistan, Egypt and Turkey will also benefit from the
expected growth of cotton exports as a consequence of the demise of the MFA.
Textile and clothing together represent 14 per cent of the country’s total
industrial production, nearly 30 per cent of total exports, and is the second
largest employment generator after agriculture. Commentators predict that
the end of quotas will increase India’s current 4 per cent share in world trade
in this sector and the creation of more than 1 million jobs between 2005 and
2010. It is a complex picture. India recorded a 28 per cent growth in textile
exports for the period January to March 2005 in comparison with the same
period the previous year. (ILO 2005).
MFA 1974–1994
The 30-year period preceding the introduction of the MFA in 1974 had been
a period governed by the General Agreement on Tariffs and Trade (GATT).
GATT was originally negotiated in the 1944 Bretton Woods Meeting to aid
reconstruction of world economies after the 1939–1945 World War. The
Uruguay Round marked the end of the 20-year agreement on textile and clothing
quotas that were negotiated bilaterally and governed by the rules of the
MFA. The MFA provided for the application of selective quantitative restrictions
when surges in imports of particular products caused, or threatened to
cause, serious damage to the industry of the importing country. The MFA was
a major departure from the basic rules and particularly the principle of nondiscrimination.
On 1 January 1995 it was replaced by the WTO Agreement on
Textiles and Clothing (ATC), which provided for a transitional process for the
ultimate removal of these quotas by 1st January 2005.
The WTO ATC 1995–2004
The WTO stated that ‘the ATC is a transitional instrument, built on the following
key elements: (a) the product coverage, basically encompassing yarns,
fabrics, made-up textile products and clothing; (b) a programme for the progressive
integration of these textile and clothing products into GATT 1994
rules; (c) a liberalization process to progressively enlarge existing quotas (until
they are removed) by increasing annual growth rates at each stage; (d) a special
safeguard mechanism to deal with new cases of serious damage or threat
thereof to domestic producers during the transition period; (e) establishment
of a Textiles Monitoring Body (TMB) to supervise the implementation of the