The Agreement on Textiles and Clothing: Is It a WTO Failure?

The historic GATT-Uruguay Round Agreement was signed in April 1994 after years of difficult negotiations. Although the textile and clothing sector was not included, a separate agreement, the Agreement on Textiles and Clothing (ATC) was also signed, with the specific purpose of dismantling the complex quota system in place and gradually incorporating the sector into the rules and disciplines of GATT-UR over a period of ten years. On the verge of the established deadline, the liberalization results achieved seem disappointing for most textile exporting countries. These results have implications for the new round of WTO negotiations. What went wrong? Is anyone to blame? This article analyzes the ATC rules and discusses conflicting interpretations of the results so far, as well as expectations for 2005.