EFFECTS OF THE EXPIRATION OF THE WORLD TRADE organization MULTIFIBRE AGREEMENT ON NIGERIA'S TEXTILE INDUSTRY
EFFECTS OF THE EXPIRATION OF THE WORLD TRADE ORGANIZATION MULTIFIBRE AGREEMENT ON NIGERIA'S TEXTILE INDUSTRY
This study looks at how the expiration of the WTO's Multi-Fibre Agreement (MFA) affects Nigeria's textile industry. The purpose of this study was to investigate the consequences of the expiration of the WTO's Multi-Fibre Agreement (MFA) on Nichemtex Limited, Ikorodu, Lagos, from 2001 to 2010.
The study aims to identify the impact of the WTO's Multi-Fibre Agreement (MFA) on Nichemtex Nigeria Limited between 2001-2010, as well as the impact of China's accession to the WTO on the same period. The study examined relevant literature on the issue under consideration.
The study included both primary and secondary data, which were obtained through in-depth interviews and questionnaires for primary sources, and secondary sources, which included the use of books,
journals, articles, internet materials, and so on for complementarity. After analysing the data, the study discovered the following: First, the expiration of Multi Fibre Agreements had a negative impact on Nigeria's textile industries.
Second, contrary to popular belief, the study found that the collapse of Nigeria's textile industries was caused by the WTO's trade liberalisation policies; in addition, both external and internal factors were responsible for the collapse of these industries, with internal factors playing a significant role.
The study also found that the WTO's trade liberalisation rules favour advanced countries over underdeveloped countries. The WTO's trade liberalisation policies have lowered the contribution of the textile industry to national development, including GDP, employment, and FDI.The report did make the following recommendations:
There is a need for a rethink on the ideological and uncritical commitment to wholesale acceptance of trade liberalisation policies without considering the peculiarities of our environment; the government should ensure that taxes payable by these industries should be fewer in number,
broad-based, and high revenue yielding with positive impacts on industry's production; this can be done by improving infrastructure, skills, and institutions required by modern production and di
Background of the Study
What is now known as the Multi Fibre Agreement under the World Trade Organisation (WTO) arose from the General Agreement on Tariffs and Trade (GATT), the only multilateral instrument governing international trade in textiles and garments.
The Multi Fibre Agreement was established in 1974 as a short-term strategy to help industrialised countries adjust to imports from the developing world. It is an international agreement under which two countries can negotiate quotas on textile and clothing imports from one another.
The Multi Fibre Agreement was thus established as a series of official quota agreements and regulations limiting textile and garment commerce between developing countries and the developed world. The expiration of the Multi Fibre Agreement (MFA) in 2005 signalled enormous potential and uncertainty for the textile sectors in both industrialised and developing countries.
According to Naumann (2006), no other industry has witnessed such tight institutionalisation of quantitative constraints, which has had far-reaching planned and unexpected effects for Nigeria's textile sectors.
In fact, quotas in this sector have been the common denominator that has dictated the development route of the textile industries, and the single most important element leading to their global diffusion in recent decades.
The WTO Agreement on Textiles and Clothing provided for the phased reduction of MFA quotas between 1995 and 2005, hence global adjustments related to quota phase-out occurred during the Agreement's early stages. Against this environment, this study investigated the implications of the MFA expiration on Nichemtex Nigeria Limited, Ikorodu, Lagos.
However, it is crucial to note that since 1974, global commerce in textiles and clothing has been governed by the Multi-Fibre Arrangement (MFA), which many industry.