The end of country quotas on textile exports marks one of the most major events of the world economy—one that can cause tectonic shifts in the global economic landscape.

The Multi-Fibre Agreement (MFA), under which these quotas were organized, was put in place in 1974 to protect the textile industries in the US and in Europe. The MFA expired in 1994, but the quotas were continued and managed by the WTO, with the understanding that these would be terminated at the start of 2005.

That has happened now and the winds of change are palpable. The US is expected to lose a large number of jobs in this sector, which has anyway dwindled over the last decades. In 1974 there were 2.4 million workers in the textile sector in the US. By 2000, 40 per cent of these jobs were gone.

What is more worrying is that there are many poor countries that could lose out. Anticipating the end of quotas, exports from El Salvador collapsed by 30 per cent last November. It is expected that the apparel sector of the Dominican Republic will lose up to 40 per cent jobs.

Currently, global textile and apparel exports are just short of $500 billion per annum. To put this in perspective, India's national income is just over $500 billion; Bangladesh's and China's close to $50 billion and $1300 billion.