BEYOND THE PHASEOUT OF QUOTAS IN THE TEXTILE AND CLOTHING TRADE: WTO-PLUS RULES AND THE CASE OF US SAFEGUARDS AGAINST CHINESE EXPORTS IN 2003

International trade in textiles and clothing has been subject to strong protectionism for decades. Although the WTO Agreement on Textiles and Clothing has set procedures to phase out the quota system, this paper questions how far the regime will actually be liberalized. It highlights the significant differences between the China-specific safeguard provisions in China’s WTO accession protocol and the general WTO Agreement on Safeguards. It also examines the recent case of a US safeguard application against China’s textile and clothing products and analyses the potential impact of this case on both countries and the global economy. The analysis suggests that prospects for China’s textile and clothing exports after WTO accession may not be as optimistic as is generally assumed. For decades, the world’s textile and clothing market has been subject to a special trade regime under the Multifibre Arrangement (MFA), a construct that is in conflict with the core principles of the World Trade Organization (WTO), such as non-discrimination and transparency. For about 30 years, rich countries have so protected their domestic textile industries from cheaper imports originating in poorer nations. Not until January 1995 did the WTO Agreement on Textiles and Clothing (ATC) come into force, which attempted to reverse decades of protection in these sectors. The ATC sets out the framework and procedures to phase out the MFA and eliminate the entire quota system eventually by 2005. This should have a huge positive impact on developing countries, which have been restricted on exporting their textile products for an extended period of time. China, as the largest textile and clothin