The Post MFA era and the rise of China

From "pioneerhk" <>
Date Fri, 16 Dec 2005 11:32:32 +0800

The Post MFA era and the rise of China[1]

Au Loong-Yu[2]


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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[1] A shorter version of this article appeared in the Asian Labour Update, issue 56, Fall 2005, published by Asia Monitor Resource Centre.

[2] The author is editorial board member of Globalization Monitor, Hong Kong. Email:


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