Sustainable Development Policy Institute

SDPI - UN-TIHP workshop: What comes after the quota went? Human development effects of the ATC expiry- November 21-22, 2005

• Concept Note
• Workshop Program
• SDPI Press Releases
  • Press Release I
  • Press Release I I
  • Media Coverage
• Workshop Report
  • Workshop Recommendations in Detail

Concept Note

In January 2005, the quota system for imports of textiles and clothing under the WTO’s Agreement on Textiles and Clothing (ATC) was phased out and gave way to more liberalised global trade in textiles and clothing. The labour-intensive textile and clothing sector has been the classical start-up industry for South Asian countries to export on their own account. It is the employment intensity of the T&C industry in developing countries - in particular involving female workers – that makes the running out of the quota regime in January 2005 a hotly debated issue for human development.

The T&C sector is the biggest exporter for several South Asian economies and a large industrial employer those countries. It is anticipated that the liberalisation will support growth in Pakistan’s textile exports, in particular in raw cotton and coarse fabric. Yet, employment-intensive sub-sectors such as the clothing industry may suffer not only in Pakistan, but in various countries of the region. Increased competition may also lead to downward pressure on prices and increased demand for shorter lead times and better quality. This might have adverse implications for working conditions.

Overall, the ATC expiry provides a test case for the development costs and benefits of the multilateral trading system for developing countries. The South Asian region is a particularly interesting case due to the presumably dissimilar impact of this agreement on the individual countries. Therefore, during the two-day regional workshop,

• the human development effects of the ATC expiry during the first year after the quota expiry,
• the effectiveness of mitigation mechanisms for negative human development impact of the ATC expiry as well as
• strategies to ensure the development-friendliness of the multilateral trading system will be discussed.