The MFA Forum was established in early 2004 in response to growing anticipation throughout the garment and textile industry that the phase-out of quotas would lead to major changes in the sourcing of garments, and potentially negative consequences for countries that had come to rely on garments exports.
Since 1974, the Multi-Fibre Arrangement (MFA) governed quotas restricting imports of garments and textiles to the EU and the US from countries with burgeoning production and competitive advantage due to significantly lower labour costs. The phase-out of these quotas has long been pursued in the spirit of breaking down protectionist barriers that frustrate trade by developing countries. The MFA was phased out on 1st January 2005. However, the post-MFA era holds potential dangers for the least-developed countries (LDCs) that had enjoyed exemptions from quotas and had consequently developed significant garment and textile production for export. In many LDCs, the garment and textile industry provides most of that country's income, employment and foreign exchange.
Up until now, no international multi-stakeholder initiative has been created to explore how the combined competencies of different actors could guide the transition of this sector to a post-MFA world. The failure to responsibly manage the transition to a post-MFA world carries several possible dangers or threats:
(a) Foremost is the potentially negative impact on workers, communities and
local and national economies.
(b) The perceived culpability of business, as well as other institutions, in not
preventing this negative impact, and the impact on their reputation.
(c) The further erosion of trust in the broader agenda of development through
trade.
In its first year, the MFA Forum conducted and commissioned research into the anticipated impacts of the end of the Multi-Fibre Arrangement, a system of quotas that had been in place since 1974 and was due to end in January 2005. These studies are available to download in Research.
In March 2005, the MFA Forum published ‘A Collaborative Framework for Guiding Post-MFA Actions’ to outline the principles of working with all stakeholders to address challenges in the global industry and the key roles and responsibilities of various actors. The Collaborative Framework is available for download.
At a meeting in London in May 2005, the MFA Forum decided to implement the Collaborative Framework in two countries that were certainly facing immediate challenges to maintain the competitiveness and labour standards of the industry: Bangladesh and Lesotho.