The realisation that the Multi-Fibre Arrangement (MFA), in place since 1974, will be phased out by the end of 2004 has produced something close to national panic in Bangladesh. Many people seem convinced that when the garment industry is no longer cushioned from the vagaries of the 'free market', its prospects for survival will be slim, at best.
Governments renegotiate the quantity of trade in this category as per the MFA, which sets developed country import quotas on textiles and garments manufactured in developing countries, countries renegotiate the quantity of trade in this category. In 1994, as a result of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), the precursor of the World Trade Organisation (WTO), member countries agreed to phase out the MFA over 10 years, in accordance with official GATT-WTO goals of eliminating quota systems and protectionist markets. One of the member countries is Bangladesh, whose economy's reliance on export earnings from the apparel industry is overwhelming.