How Much Do Chinese Bra Wars Matter?

How Much Do Chinese Bra Wars Matter? - at www.moneyweek.com - the best of the international financial media

The current dispute over Chinese clothing imports provides material for plenty of (largely justified) EU-bashing and some truly awful puns. However, the significance of the reported surge in Chinese imports at the start of the year is widely misunderstood. It follows that the wider impact of the present disruption can easily be exaggerated - including the impact on inflation in the West.

The dispute is often attributed to the ending of a (non-existent) Multi-Fibre Agreement'. In fact, the Multi-Fibre Arrangement (MFA) was a system of quotas on imports of textiles and clothing from developing countries which was replaced in 1995 by the WTO Agreement on Textiles and Clothing (ATC). This set out a transitional process for the ultimate removal of these quotas, which was finally completed on 1st January 2005.

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