Direct Trade Restrictidus:

As some developing countries built up  their supply capacity in some sectors and  started exbandine their exiorts to  the develo~ed  countries. thev  faced serious problems. An  important example is the  textile sector  where  some developing  countries  had made investments  and built up supply capacity strong enough to give competition to the domestic industry of the developed coun- tries.?heir  textile exports were curtailed by the introduction  of a special  trade regime in this sector. Annual exports of specific  textile products from individual developing exporting countries were capped. Thus, the prospects of hture expansion of industrial production in this area, where competitiveness had been  achieved by  these developing countries,  were effectively  curbed.

The developing countries also faced  similar problems in  some other areas. Special restrictions were imposed in sectors, like jute, leather and steel. Thus, &re  expansion in these areas too was made almost impossible; and in fact even  the existing production was threatened, as the confidence  in the hture of these sectors  in the developing countries was very much shaken.