Introduction

Regulations in textile trade have a long history. The first multilateral agreement was signed in 1961; the most recent one will expire in 1991 and is most likely to be renewed. During these thirty years there have been major changes in the pattern of textile trade and production; the issue is whether these changes have gone far enough – or perhaps even in the right direction – for textile and clothing (T & C) trade to return to normal trade practices.

In this respect Italy represents an interesting case. As is well known, the Multi-Fibre agreement (MFA) (i.e., the main instrument of regulation in T & C) is of a discriminatory nature. In open violation of GATT principles, it is indeed applied mostly against exports from developing countries and does not interfere with trade flows among industrial countries. It is likely therefore to favour those countries, such as Italy, which within industrial countries hold a comparative advantage in T & C. As a matter of fact a country like Italy will not only benefit from protection in its domestic market, but also from the fact that other industrial countries restrict their market to developing countries.

It is not, therefore, altogether surprising to find that in Italy T & C continues to maintain a large share of industrial production, employment and exports.