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20.1 • Protectionism: An Indirect Subsidy from Consumers to Producers 473

workers, so producers were able to set up lower-cost factories in developing countries. In order to “manage”

this loss of jobs and income, the developed countries established an international Multifiber Agreement that

essentially divided the market for textile exports between importers and the remaining domestic producers.

The agreement, which ran from 1974 to 2004, specified the exact quota of textile imports that each developed

country would accept from each low-income country. A similar story exists for sugar imports into the United

States, which are still governed by quotas.

Nontariff barriers are all the other ways that a nation can draw up rules, regulations, inspections, and

paperwork to make it more costly or difficult to import products. A rule requiring certain safety standards can
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