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A review on free trade principle in theory and practice suggests that trade liberalization is merely rhetoric under which industrialized countries can pursue specific interests of certain actors more deceptively. The purpose of this thesis is to testify whether this preliminary result on general trade issues is valid in the textile and clothing sector as well. The reasons for the author to narrow her research scope down to this industry are that: first, textiles and clothing had been subject to consistent trade protectionism for more than thirty years since the discriminatory Multi-Fiber Arrangement (MFA) in 1974; second, the Agreement on Textiles and Clothing (ATC) in 1995 was designed to remove all quota restrictions by 1st January 2005 via a ten-year transitional period; third, the European Union (EU) raised safeguard investigations within four months after the expiry of the agreement, and succeeded in re-introducing quantitative restraints back to this sector. The intense and dramatic Europe-China textile dispute in 2005 started from the completion of quota abolishment, but ended up with quota re-imposition, which inspires the author to ask whether the European Union’s trade liberalization in the textile and clothing sector is rhetoric or reality. The thesis examines the conventional stance of the Union’s textile and clothing policy, the actual fulfillment of the Agreement on Textiles and Clothing (ATC), and the development of the Europe-China trade dispute on in 2005. In order to identify involved interest groups and their demands during the implementation of the agreement and in the dispute shortly afterwards, the thesis also analyzes: first, the interaction between protectionist lobbying groups and national governments at the Union’s level; and second, the divergence on the attitudes towards China’s expansion in the European market among member states.             Comparing the Union’s early promises in the Agreement on Textiles and Clothing (ATC) with its actual behaviors during implementation and in dispute, the author finally concludes that the Union’s trade liberalization in the textile and clothing sector is merely rhetoric under which the European Union (EU) pursues the protectionist interests of its domestic textile and clothing producers and those member states with substantial textile and clothing industry.

The goal of this thesis is to describe the most important trade policy instruments that have been used in international trade in textiles since the second half of the 20th century, and to deduce the implications of the instruments on the textile sector, mainly the European one. The thesis introduces the classification of instruments in the trade policy used in the international trade in textiles and economic consequences of chosen instruments; brief characteristics of evolution of international trade in textiles since the second half of the 20th century, change in localization and sector structure of the textiles and clothing industry and main trends in its evolution. There are described most important multilateral agreements concerning the trade in textiles: Short-Term Arrangement regarding International Trade in Cotton Textiles, Long-Term Arrangement regarding International Trade in Cotton Textiles, Multifibre Arrangement, Agreement on Textiles and Clothing and current trends in contractual instruments followed by autonomous instruments such as anti-dumping and anti-subsidy measures and particular cases. The thesis includes consequences of the instruments mentioned above. In the last chapter, the trends in the evolution of instruments are summarized and the reflection on possible solutions for the European, and thus also Czech textile and clothing industry, is mentioned.