The Rise of Bangladesh’s Textile Trade

THE RISE OF BANGLADESH’S TEXTILE TRADE

1) There are few reasons why the Free trade system regime would benefit Bangladesh. Firstly, since Free trade is a system of tariff barriers and export incentive schemed aimed at strengthening the competitiveness of local producers. The shift in the free trade regime in the textile industry was also good for Bangladesh because until 2005, Bangladesh’s opportunities in the developed nations were governed by quotas system, however, when the quota system was replaced with free trade policies, Bangladesh was able to increase its exports. The country’s low cost, productive labor force and its strong network of supporting industries give it a competitive advantage in the production of textiles. Western importers looking to diversify their supplier’s base and are also attracted to the country. The free trade regime was a positive turn around for the Bangladesh textile industry because it supported the economy as a whole.

2) High development countries like the USA would take a loss. Countries like China would also take loss because demand would decrease thereby decreasing their supply. During the 2008-2009 global recession, Wal-Mart and other retailers increased their purchases from Bangladesh to take advantage of the country’s low cost garment. Bangladesh’s low cost, but highly productive workforce and strong supporting industries give the country a competitive advantage in the textile industry allowing it to sell garments at lower prices which can then be passed along to customers. However, this of course would imply that fewer garments are being purchased locally and that the U.S.A workers could find their higher cost jobs are threatened. Bangladesh economy would slowly develop thereby improving the economy. In conclusion, I believe the overall benefits of importing from Bangladesh outweigh the negatives because there are way more people who benefits from low price.

3) The move of Bangladesh to become dominant...