The Evolution and Demise of the Multi-Fibre Arrangement: Examining the Path of Institutional Change in the Textile and Apparel Quota Regime

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Matt, Svetlana
Agreement on Textiles and Clothing; ATC; Economics
thesis / dissertation description
An institution originally intended to protect the interests of importing developed countries, the Multi-Fibre Arrangement (MFA) imposed quanta restraints on textile and apparel imports. Governing trade policy in textiles and apparel for thirty years (1974-2004), the MFA was reformed on four occasions, with each revision attempting to accommodate the concerns expressed by the domestic industry lobbyists. Despite increasingly restrictive trade barriers, foreign competitors were able to take advantage of various opportunities to transship their goods, and consequently, continued to acquire an increasing share of the U.S. textile and apparel market. While the demise of the MFA forced countries to remove the quota restraints that were imposed under the multilateral framework, the U.S. continues to maintain considerable trade barriers against textile and apparel imports. This paper applies Douglas North's theoretical framework concerning the process of institutional change in order to analyze the principal forces underlying the MFA's multiple reforms, and to further explain the longevity of quantitative restraints on textiles and apparel.