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10.
Referring to the working of the MFA, he stated that the Arrangement, which was a derogation from GATT, was not by any means a document of free or liberalised trade. It was merely a device by which the developed countries wanted to regulate trade in textiles pending the provision of structural adjustments in their economies. However, the objective of the MFA, namely to enable a planned move-over from the inefficient to the efficient sectors had not come about; the increase in the textiles capacity of the developed countries during the last 15 years had tended to perpetuate their position in the textiles trade, which augured ill for the removal of restrictions in this sector. Two arguments which had been put forward by developed countries were both based on fallacious premises: -
(i) the existing high share of developing countries
in imports by developed countries; and
(ii)
the low prices of the textiles exported by the developing countries.
The MFA was of necessity a compromise between the interests of exporting and importing countries, though it was weighted against exporting countries. Under the Agreement,
no new restrictions on textiles imports were permitted unless justified under GATT or Article 3 of the MFA, and the participating countries had agreed that restrictive measures under the Article would be used sparingly. Nevertheless, some thirty-five measures of that kind had been taken since the inception of MFA, and developing countries had contended that consultations and negotiations under the Arrangement had turned out to be one-sided and inequitable. The resort to Article XIX of GATT by a few countries in addition to and outside MFA had added to the difficulties of developing countries. Restraints had also been introduced on imports of handloom products which under Article 12 of the Arrange- ment were outside its purview.
11. The discussions on this topic largely and necessarily touched on the objectives of the MFA, its working and the resultant situation for developing countries exporting textiles. In endorsing the points made by Mr. Abbas, many participants referred at various stages of the debate to the imbalance in their share of textiles trade notwithstanding their natural endowments and skills as well as greater efficiency in many cases; to the one-sided nature of the bilateral consultations under Articles 3 and 4; and to the relegation of the main objective of the Arrangement, namely, liberalisation of trade in textiles, to a secondary if not insignificant role in relation to the considerations of so-called market disruption.
12. In the course of his contribution to the discussion on this topic as well as to consideration of the working of the MFA, Mr. Salib of the GATT Secretariat referred to the documentation prepared by GATT in the context of the current discussions in the Textiles Committee. As required by the Committee itself, the Textiles Surveillance Body established
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