Multi Fiber Agreement Related To Wto

The EU`s approach to dealing with this development was somewhat different from that of the US. Things have been complicated by the fact that the European Commission`s decisions are based on a form of consensus among their Member States, which must individually ratify exceptional measures limiting imports from a given country. However, the interests of European countries are different in the textile sector, with some of the southern countries having a long-established national manufacturing industry (including Spain and Italy), while some of the “central” and “northern” countries of Europe have powerful multinational retail sectors. Retailers have advocated unrestricted trade development (and thus unlimited growth and choice of imports), while countries with domestic manufacturing sectors have favoured more orderly import developments, which would not adversely affect domestic producers. Following a significant increase in imports from China, the European Commission and China held bilateral Article 242 consultations in June 2005. Once again, the negotiating parties have opted for a bilateral approach instead of the more complex process in which the WTO has been directly involved. A resulting Memorandum of Understanding (MoU) covered 10 product categories that “threatened the orderly development of trade within the meaning of Article 242” of China`s WTO accession agreement and legislation previously adopted by the European Commission. These consisted of categories 2 (cotton fabrics), 4 (T-shirts), 5 (sweaters), 6 (trousers), 7 (blouses), 20 (bed linen), 26 (dresses), 31 (bust racks), 39 (table and kitchen linen) and 115 (linen or ramie thread). In the EU-China Memorandum of Understanding, specific quantitative limits were agreed for 2005 in the ten categories above. Table 4 gives an overview of the growth rate by import category which served as the basis for these new limit values and covers the period from January to April 2005. Column 5 shows the ratio (expressed as a percentage) between imports from China and the predefined and specific EU alert levels during this period. All percentages are based on data from the European Commission`s SIGL import monitoring database (3), published in a Council Regulation. .

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