Textiles:

Normal  rules of fiee trade were suspended in the sector of textiles for over three decades. This sector is an example of protectionist pressures in the major developed countries gaining ground over  the principle of fiee and open trade. Within  just over a decade of the start of the GATT, the textile industry  in the major developed  countries was unable  to compete with the imports  from Japan and the developing  countries.  An option within  the GATT which  the developed countries had at that time was to take safeguard action under the GATT. But, following the principle of  the MFN, this would have required a developed country  to  restrict the imports from all countries, including the developed countries too, which they did not want to do.

The major developed countries neither allowed the normal market forces to operate freely  nor  followed the path allowed by the GATT. They simply decided  to  ignore  their obligations under the GATT and bypass it. They decided to carve out special trade rules in the textiles sector in derogation of the normal GATT rules.   hey got a special restrictive regime established in this sector which would permit having predetermined limits to the export of textile items from a developing country to a developed country.  

The special regime in this sector took the form of the Short-Term Agreement (STA), Long-Term Agreement  (LTA), Multi-Fibre Agreement  (MFA, 1973-94) and the Uruguay Round Agreement on  Textiles  and Clothing  (ATC, 1995-  2004). The developed countries went on insisting on extending  the MFA, which had been initially installed for four years, i.e., 1973-77. The special trade regime in this area, instead of gradually progressing  towards  trade liberalisation, became increasingly more restrictive. The product coverage expanded fiom cotton in the STA  and LTA to wool and man-made fibres in the MFA, which was further enhanced to cover some other fibres like jute  and silk blend. And finally the ATC added to it, by including pure silk. Finally the special trade rules in this sector ended at the end of 2004 and now the normal rules of the WTO apply to this sector.