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The Multifibre Arrangement and Its Effects on Developing Countries

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  • Goto, Junichi

Abstract

The MFA provides for bilateral quotas against textile and clothing exports from developing countries. Thus, although it is administered under the auspices of GATT, the MFA derogates two GATT principles: nondiscrimination and the avoidance of quantitative restrictions. The impact of the MFA on developing countries is examined in the article. Four important short-term effects of the MFA on exporting developing countries are (1) the foregoing of exports, (2) the transfer of quota rents, (3) the shift to unrestricted exporters, and (4) the upgrading of products. In the long term the MFA discourages newcomers from becoming successful exporters of textile and clothing products. Although it also encourages foreign investment in unrestricted developing countries, in general the MFA is harmful to current and potential exporters of textiles and clothing in developing countries, and it benefits domestic producers of textiles and clothing in the importing industrial countries. Copyright 1989 by Oxford University Press.

Suggested Citation

  • Goto, Junichi, 1989. "The Multifibre Arrangement and Its Effects on Developing Countries," The World Bank Research Observer, World Bank, vol. 4(2), pages 203-227, July.
    • Handle: RePEc:oup:wbrobs:v:4:y:1989:i:2:p:203-27
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    Cited by:

    1. Kenneth A. Reinert, 1993. "Textile and Apparel Protection in the United States: A General Equilibrium Analysis," The World Economy, Wiley Blackwell, vol. 16(3), pages 359-376, May.
    2. Grogan, Louise, 2023. "Manufacturing employment and women’s agency: Evidence from Lesotho 2004–2014," Journal of Development Economics, Elsevier, vol. 160(C).
    3. Fuzhong Chen & Shakil Ahmad & Guohai Jiang & Jinwei Chen, 2023. "Factors Affecting Textiles Products Exports of Major Producers: A Gravity Model Approach," SAGE Open, , vol. 13(4), pages 21582440231, December.
    4. Goto, Junichi, 1990. "A formal estimation of the effect of the MFA on clothing exports from LDCs," Policy Research Working Paper Series 455, The World Bank.
    5. Ayoki, Milton, 2017. "The impact of multi-fibre agreement phase-out on Sub-Saharan Africa’s textiles and clothing exports," MPRA Paper 88122, University Library of Munich, Germany.
    6. -, 1996. "Tendencias recientes en el comercio de Centroamerica," Sede Subregional de la CEPAL en México (Estudios e Investigaciones) 41131, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, University Library of Munich, Germany.
    8. Ayoki, Milton, 2016. "The textile and clothing industry in Lesotho in the wake of the multi-fibre agreement phase-out," MPRA Paper 88112, University Library of Munich, Germany.
    9. Krishna, Kala & Ling Hui Tan, 1992. "Rent-sharing in the multi-fibre arrangement : evidence from U.S. - Hong Kong trade in apparel," Policy Research Working Paper Series 1003, The World Bank.

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