WORLD TRADE ORGANIZATION

AGREEMENT ON
TEXTILE AND
CLOTHING
PRESENTED BY:
PRESENTED TO: PRANAV CHANDRA (20423BIB029)
DR. HARSH PRADHAN NIKHIL KUMAR BHARTI (20423BIB024)
SAUMYA JAISWAL (20423BIB046)
(ASSISTANT PROFESSOR)
LINIYA JAIN (20423BIB022)
ISHITA AGARWAL (20423BIB065)
 Topics to Cover
Introduction to ATC
Cotton agreement, multifibre
arrangement
Product coverage, program for
integration
Progressive liberalization of the
restraints through improved growth
rates
Treatment of quantitative
restrictions
Transitional safeguard mechanism,
textile monitoring body
Hypelane Clothing Co. 2020
 Agreement on Textiles and
Clothing(ATC)

ATC is designed to correct a long standing anomaly

in the multilateral trading system.
The ATC was negotiated in the Uruguay Round of
Trade Negotiations. It replaced the MFA.
The ATC also provided that the ATC itself would be
terminated, this termination duly took place on 1
January 2005, the ATC is no longer in effect.
 Cotton Agreement
The Cotton Sub-
It was first proposed
Committee was set
in 2003, a Cotton Sub- Cotton is discussed at the
WTO on two tracks:
up under the
Committee was set up
the trade reforms framework at the 19
under the Agriculture
Committee’s “Special needed to address November 2004
Sessions”.
subsidies and high trade meeting of the
barriers for cotton, agriculture
the assistance provided
negotiations.
to the cotton sector in
developing countries.
Multi-Fibre Arrangement
The arrangement was first established
under the (GATT).
The Multifibre Arrangement (MFA) governed
international trade around garments and
textiles from 1974 through 2004.
It imposed quotas on the amount of
clothing and textile exports from developing
countries to developed countries.
 Product
Coverage
The textile and clothing products to
which this Agreement applies are
set out in the Annex
The Annex lists textile and
clothing products defined by
Harmonized Commodity
Description and Coding System
(HS) codes at the six-digit level.

The Harmonized System is an

international nomenclature for
the classification of products
In general, the products covered are
those in Section XI (Textiles and Textile
Articles) of the HS, excluding however
natural fibres such as raw cotton, jute,
silk, etc.

In all, the list consists of 781 full lines at

the 6-digit level of the HS, and another
14 lines of which only certain portions
are covered by the ATC.
The Integration
Process
Step-by-step integration

Milestone 1: 1 January 1995 At least 16 percent of

products to be brought under the WTO rules.

Milestone 2: 1 January 1998 At least a further 17 percent

of products to be brought under the WTO rules.

Milestone 3: 1 January 2002 At least a further 18 percent

of products to be brought under the WTO rules.

Milestone 4: 1 January 2005 All remaining products (up

to 49 percent) to be brought under the WTO rules.

There shall be no extension of this Agreement.

Once a particular product is integrated, all quota

restrictions on its imports from WTO Members are
terminated.
PROGRESSIVE LIBERALISATION OF RESTRAINTS
THROUGH IMPROVED GROWTH RATES
REMOVAL OF QUANTITATIVE RESTRICTIONS

NOTIFICATION REQUIREMENT
RESTRICTIONS MAY BE MAINTAINED OR
MUST BE PHASE-OUT
REVERSE NOTIFICATION
NOTIFICATION
REQUIREMENT
ALL RESTRICTIONS MAINTAINED
BY MEMBERS ON TEXTILE AND
CLOTHING PRODUCTS
WHETHER THEY WERE
CONSISTENT WITH GATT 1994
OR NOT WERE TO BE NOTIFIED
UNDER ARTICLE 3.

THIS DID NOT APPLY TO

RESTRICTIONS FORMERLY
MAINTAINED UNDER THE MFA,
WHICH WERE COVERED BY THE
PROVISIONS OF ARTICLE 2.
 RESTRICTIONS MAY BE
MAINTAINED OR MUST BE
PHASED OUT
Those restrictions notified, which were justified

under a provision of GATT 1994 could be

maintained.

All restrictions which could not be justified under

a GATT 1994 provision had to be either brought

into conformity with GATT 1994 within one year

following the entry into force of the ATC if this was

possible, or if not, it had to be phased out

progressively within the ten year transition period

according to a program to be presented to the

TMB not later than 6 months after the entry into

force of the ATC.

REVERSE
NOTIFICATION
SPECIFIC PROVISION WAS ALSO
MADE FOR REVERSE
NOTIFICATION TO THE TMB BY
ANY MEMBER WHICH
CONSIDERED THAT ANOTHER
MEMBER HAD NOT MADE A
NOTIFICATION REQUIRED BY
ARTICLE 3.
TRANSITIONAL
SAFEGUARD
MECHANISM
 Allows members to impose

restrictions
Safeguard measures are defined as
“emergency" actions with respect to Only if they are able to prove
increased imports of particular products,
where such imports have caused or threaten
serious damage to domestic
to cause serious injury to the importing
Member's domestic industry
industry.
 Key Points

The transitional safeguard may be

applied by any Member.
Article 6 of the Agreement lays
down the procedures and
conditions.
Should be applied as sparingly.
Required to be reviewed by the
TMB.
TEXTILE MONITORING
BODY
Why was TMB established?

3
to take other actions
2
specifically required of the
to examine all measures
TMB
taken under the ATC and
under various Articles of
1 their conformity with its
the Agreement
to supervise the provisions
implementation of the ATC

COMPOSITION OF TMB
Consists of a Chairman and 10
members
TMB PROCEDURES
appointed by WTO Members
designated by the Council for
Trade in Goods
Required to discharge duties on
ad personnam basis.
MAIN FUNCTION OF TMB
a review and supervisory function
a dispute resolution function
TMB has developed its own
procedures
TMB is required to take all
decisions by consensus
TMB invites representatives of
WTO Members that are parties to
a dispute to present their views
and answer questions
Thank You