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The Post MFA era and the rise of
China
Au Loong-Yu
The
Agreement on Textiles and Clothing (ATC) expired in 2005, ending 30 years of a
quota system under the Multi-Fibre Arrangement (MFA). Ending the ATC signalled
the World Trade Organisation’s (WTO) promotion of free trade in this sector.
However, phasing in free trade here has proved to be far from frictionless. In
face of surging textile imports from China since January 2005, the
US and EU used the protectionist
clause in China’s WTO accession agreement to
restrain China’s imports.
China threatened retaliation. Although
the EU and China eventually reached an agreement, in
practice deferring abolishment of quotas to 2007, restraining
China’s exports to the EU, there is still
no agreement between China and the
US. Though there are basic common
interest between the ruling elites and business sector of these three areas over
the issue, periodic friction can be expected in coming years. This essay does
not spill too much ink on the current negotiation between the three parties, but
rather focuses on a wider picture: What is at stake for working people around
the world with the free trade model as promoted by WTO in general, and the
phasing out of MFA in particular? How the ‘rise of
China’ relates to the above question? Is
it a zero-sum game or a win-win situation for other developing countries? What
is the appropriate position of working people in both the developed and
developing countries?
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