The discriminatory trading system that restricted textiles and clothing exports from developing countries for over 40 years finally came to an end. Both developed and developing countries stand to gain substantially from the removal of quota restrictions and the full integration of textiles and clothing into normal WTO rules.
While many quantitative studies were undertaken to examine the impact of the ATC termination, post-ATC analysis cannot be reduced to a single calculation of who will win or lose. There are economic, political and geographical factors which would affect trade in textiles and clothing in the post-ATC trading environment.
This paper attempts to highlight these factors and to argue that the success of an exporter of textiles and clothing in the post-ATC phase depends on how it will take advantage of the opportunities, and overcome the challenges, that ATC expiration brings about.
The first section discusses the historical perspective of trade in textiles and clothing and the recent new developments. This is followed by a review of the textiles and clothing trade patterns under the MFA and an
ATC, and the analysis of the factors influencing post-ATC effects.
The paper concludes with policy recommendations for ensuring and maximizing development gains in the
post-ATC trading environment.