The Multifibre Agreement has regulated the international trade in textiles and clothing by imposing restrictions on the quantities of textile products that developing countries could export to developed countries. It was introduced in 1974 as a measure to enable developed countries to prepare for the management of imports from developing countries, which in the textile sector, a high-intensity sector of labor factor, have a comparative advantage due to their low cost of work. The Multifibre Agreement is held responsible for major distortions of world trade.
The eighth round of GATT negotiations, the Uruguay Round, has foreseen the elimination of the agreement in ten years, eliminating all quantitative restrictions on textile and clothing trade. The complete elimination of quotas took place only on 1 January 2005. The end of the Multifibre Agreement has caused a strong growth in textile exports from China; the harsh reaction of American and European textile manufacturers has led to new temporary protection measures for Western markets.
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