The Uruguay Round Agreement: Implications for Pakistan's Textiles and Clothing Sector (International Trade) (Report‪)‬

The UR agreement has been widely perceived as constituting a major advance in the process of multilateral liberalisation of trade in goods and services and, when fully implemented, is expected to improve economic efficiency and welfare from the global, national and sectoral standpoints. The present paper explores the implications of the Uruguay Round agreement for Pakistan's textiles and clothing Sector. With the managed trade era in textiles due to be phased out in 205, it is important that the domestic textiles and clothing industry be prepared for a much more competitive environment, both at home as well as in foreign markets. The phasing-out of MFA type restrictions and other trade barriers is generally expected to have positive effects on Pakistan's exports of textiles and clothing in the long run. At the same time, however, the erosion of preferential treatment embodied in the Multi-Fiber Arrangements poses many challenges to the textiles and clothing industry in Pakistan. The emerging scenario of freer trade in textiles and clothing highlights the need to enhance competitiveness in this sector by improving product quality, efficiency of resource use, and productivity. Also, there is a need to advance in the reforms and liberalisation of the economy, and to focus public policy towards addressing the structural problems of the textiles and clothing industry with a view to enabling it to compete better in the more competitive international market. 1. INTRODUCTION