Under MFA, the bilateral quotas under the Agreement on Textiles and Clothing will be extended in 3 stages and is integrated wholly by the month of Jan 2005. In the 1st stage, the quotas growth rate volumes will higher by 16%. In the 2nd stage, the quotas growth rates will be developed further by 25%. Finally in the last stage, the rates of growth will be increased by 27%
During 1995 to 2004 transition period the Agreement on Textiles and Clothing promises to distribute an essential amount of liberalization compared to MFC. In the first stage, integration will be in terms of not value and volume, and the integrations of stage 1 and 2 were concentrated in low-value-added products (Textile Monitoring Body, 1997). In the second stage, combined products is fallen in either one of the following 4 kinds such as clothing, yarns and top, made up textile products and fabrics. In spite of this the integration of stage 1 and 2 is turned away from clothing. The clothing share in the combined terms was just 8, 12, 7 and 11% joining stages 1 and 2 together, respectively for Canada, US, European Community and Norway (Textiles Monitoring Body, 1997). In the 3rd stage during negotiations the importing countries extended the Annex to involve several products never originally directed to MFA. Similarly in the integration of stage 1 consisting of only one product such as work gloves exported to Canada subjected earlier to quantitative prohibitions (Textiles Monitoring Body, 1997). The stage 2 consists of several prohibited products but reflected the extended Annexure. Finally it is noted that around 1 half of the liberalization is planned to exist on Jan 1st 2005. Because the Agreement of Textiles and Clothing enhances the secured countries to denote which products are liberalized in which stages is very likely that politically sensitive products is included in last stage. In the Agreement on Textiles and Clothing another noticeable problem is the safeguard provisions (Lardy, 2002).