Quota Elimination is an initiative to eliminate the use ofquotas in alltextile andclothing trade between nations which are members of theWorld Trade Organization (WTO).[1] Doing so was one of the key commitments undertaken at the WTOUruguay Round in 1994 to retire theMulti Fibre Arrangement. The ATC, that is the WTOAgreement on Textile and Clothing, is the regulation governing textile and clothing and implements this commitment.[2]
The agreement established a ten-year period which would eliminate the use of quotas in all textile and clothing trade between WTO nations. It expired on December 31, 2004. As of January 1, 2005, the garment and fabric trade worldwide is operating without quotas. To ensure the respect ofbilateral textile agreements, goods shipped prior to January 1, 2005 and subject to the 2004 quotas will be subject to the import regime of 2004 even if they are presented tocustoms after January 1.
To avoid excessive burdens on trade and customs, as of April 1, 2005, all garments and fabrics will trade freely into theEuropean Union (EU). Although the quotas have been eliminated, the regulation also sets up astatistical monitoring system for the imports of textiles and clothing into the EU. This system is to provide information regarding the chance ofmarket disruptions and will allow for the governing body to closely follow the trade in this new environment. This regulation is beneficial forCanadian clothing and fabric manufacturers because now there are fewer restrictions. It is hoped by some[who?] that this ruling will open up theEuropean market in the near future.[when?] Benefits of the abolition of quotas are also expected to textile companies in India and Pakistan.
