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What Is Agreement on Textiles and Clothing

The Agreement on Textiles and Clothing (ATC) was a unique international trade agreement that governed the global textile and clothing trade from 1995 to 2005. It was part of the broader World Trade Organization (WTO) multilateral trading system and came into effect on January 1st, 1995, as part of the Uruguay Round of trade negotiations.

The main objective of the ATC was to help integrate the textile and clothing sector into the broader multilateral trading system and promote freer trade in textiles and clothing. It did so by setting up a comprehensive program for the progressive elimination of quotas or quantitative restrictions on textile and clothing exports from developing countries to developed countries.

Before the ATC, the global textile and clothing trade was heavily regulated by a system of quotas, which limited the amount of textiles and clothing that could be imported into developed countries. This system was put in place in the 1960s to protect the domestic textile and clothing industries of developed countries from competition from developing countries.

However, the ATC recognized that this system was no longer sustainable and was hindering the development of the global textile and clothing industry. Developing countries argued that the quota system was unfair and prevented them from competing on an equal footing with developed countries.

To address these concerns, the ATC created a program for the gradual elimination of quotas over a ten-year period. The program was designed to provide developing countries with greater access to developed country markets and help them increase their share of the global textile and clothing trade.

The ATC also established a textile monitoring body to oversee the implementation of the agreement and ensure that all WTO members were complying with its provisions. This body was tasked with monitoring the trade in textiles and clothing, providing early warning of any potential trade disruptions, and promoting dialogue among WTO members to resolve any disputes that arose.

Overall, the ATC was a significant milestone in the history of the global textile and clothing trade. It helped promote freer trade in textiles and clothing, opened up new opportunities for developing countries to participate in the global economy and paved the way for the creation of a more integrated and inclusive multilateral trading system.