TRADE REGIME FOR TEXTILES AND CLOTHING: UK OBJECTIVES
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Background
1.
The
The Multi-Fibre Arrangement (MFA) allows developed countries to restrict imports of textiles and clothing (TC) from the Third World, in derogation of their obligations under the GATT. developing countries agreed to it originally in the early 1970's in fear that the developed countries would flout their GATT obligations anyway, and hoping that limited access to developed markets would at least be assured access. But successive MFA's have got tighter. Under the current MFA the European Community has bilateral agreements with 27 LDC suppliers. (In addition there are voluntary restraints agreed with Mediterranean suppliers, notably Portugal, and unilateral restrictions on imports from State Trading Countries, and Taiwan). The quotas allow imports to grow on average by 2-3%; but only negligible growth for many items from the more competitive suppliers (especially Hong Kong). The system also provides for new quotas to be imposed on over-successful exporters of particular items. The imports restricted account for 14% of British TC consumption: 25% comes from unrestricted foreign sources (mainly EC) and 61% from domestic production. All this involves over 600 quotas on UK TC imports. The Department's Import Licensing Branch issues about 150,000 TC licences a year, accounting for 90% of its work. In all, over 80 DTI officials are involved in restricting TC imports.
Timetable
2.
Before then:-
Most of the MFA restrictions expire at end 1986.
(1) UK objectives for the ensuing period have to be
defined;
(ii) and the European Community position established;
(iii) and a view taken in the GATT Textile Committee by
July 1985; to extend, modify or discontinue the restrictions;
(iv) and any successor regime negotiated in the GATT
before July 1986;
(v) and new bilateral agreements negotiated pursuant
to that regime.
Discussions on an EC position will start early in 1985.
UK Objectives
3. Hitherto the UK has been an influential voice in the EC on this subject, and the EC likewise in the GATT. UK objectives thus need careful thought. In deciding them HMG has to consider how the TC import regime affects:-
(i) the British TC industries;
(ii) the rest of the British economy;
the UK's international commercial interests.
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