The trade in textiles has been regulated since the 1960s and since January 1, 1974,
through the Multi-Fibre Arrangement (MFA). The MFA exempts the textiles and garments
trade from the GATT disciplines, allowing industrial countries to place bilateral quotas on
imports of various textile and garments product categories. This was meant to protect
producers in the North and allow them time to restructure and adapt to competition from
cheaper imports from the South. During the Uruguay Round of trade negotiations, it was
agreed that the MFA would be phased out in steps through the implementation of the
Agreement on Textiles and Clothing (ATC). On January 1, 2005 the MFA will be fully
phased out and hence the trade in textiles and garments will no longer be subject to quotas