In order to protect the internal market from imports from developing countries, the Multifibre Agreement (MFA) was introduced by the industrialized countries in 1974. As the name suggests, this regime extended trade restrictions to wool and synthetic fibers, in addition to cotton. The MFA has imposed quotas for the amount that developing countries have been allowed to export to industrialized countries, resulting in job and export losses in developing countries. The MFA was not compatible with the philosophy of free trade and violated the principles of the multilateral system. The study focuses on the potential effects of exiting from the Multifibre Agreement (MFA) on India`s textile and clothing exports. To test this, he uses the shift-share analysis technique using commercial data from 1996 to 2006. The result shows that the exit from the MFA did not allow the Indian textile and clothing industry to export. Perhaps the effect of the quota system is so deeply entrenched that trade liberalization has not yet manifested itself in exports of textile products to India. During the GATT Uruguay Round, it was decided to place textile trade under the responsibility of the World Trade Organisation. For the phasing out of quotas, the Agreement on Textiles and Clothing (ATC) has been included in the Regulation.
ATC was a transitional regime between the MFA and the full integration of textiles and clothing into the multilateral trading system. Integration is expected to take place in four stages over a period of ten years (1995-2005). Industry contributes to employment in industrialized countries. In the European Union (EU), for example, the sector is dominated by small and medium-sized enterprises, which concentrate on a number of regions heavily dependent on this sector. On the other hand, developing countries have a natural advantage in textile production due to low labour costs. The textile and clothing industry is also one of the sectors where developing countries are most likely to benefit from multilateral trade liberalization. . Shift-Share analysis overcomes these restrictions by taking into account both the size and growth of a given market when evaluating its export performance with another market. . South Asian Journal of Management article * 16% of the total volume of imports of textile and clothing products listed on the date of entry into force of the ATC (January I1 1995). . Analysis of the share of posts is widely used to analyse the difference between regional and national growth rates in variables such as export growth, employment, etc.
If it applies to the study of export growth, it measures the relative profit or loss of export markets relative to overall export growth. Net export slippage is a better measure of export market performance compared to frequently used measures, such as absolute and relative changes in exports. The phases of exit from the AMF under ATC were as follows:. In the case of absolute change, the figures exaggerate the importance of larger markets, while relative or percentage changes in exports tend the other way around. The importance of smaller markets. For example, in a comparison between the United States and Nepal as India`s export market, the absolute increase in exports in the former is expected to be greater than in the latter, because the United States is a large market. For the same reason, one would expect the growth of Indian exports to the United States to be lower than that of Nepal. . .