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MFA phase-out and rise of China: the consequences for the RMG sector in Bangladesh.

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Report on MFA phase-out and rise of China: the consequences for the RMG sector in Bangladesh. SUBMITTED TO: Course teacher: Tahmina Ferdous Department: BBA Subject: Introduction to Business Course Code: 105 SUBMITTED BY: Group Name: NeuralVelocity Name of Members: 1. Nazmur Sakib 110710421 BBA _____________ 2. Amena Khatun 110710401 BBA _____________ 3. Shumon Halder 110710041 BBA _____________ 4. Md. Mahibur Rahman 110710271 BBA _____________ 5. Ronald Pranjal Rozario 110710221 BBA _____________ Acknowledgements We all praise to Allah for enabling us to complete our "Term Paper" with good and sound health. Thanks to our course teacher Tahmina Ferdous Madam for her help and guideline in completion of this report. She also gives us some extra time to complete this report. Some of our friends help us trough their suggestion and reference. Among them some encouraged us to do the report properly. Thanks to those friends also. Letter of Transmittal Dear Madam, Here is the report on the MFA phase out and rise of china. You asked us to minimize how much it effect in Bangladesh RMG sector. To help you gathered what I believe to be the most complete information available much of the operating information comes from various source. In this report all professional analysis data are subjective. We sincerely hope that our analyses will help you to in making the correct decision. I truly appreciate this assignment and if you need any assistance we are all time ready help you. Sincerely, Behalf of group Ameena Khatun Group Leader. Table of Contents No. Title Page 01 Executive Summery 06 02 Introduction 07 03 Origin of the study 08 04 Objective of the study 09 05 Methodology of the study 10 06 Limitation of the study 11 07 About World Trade Organization (WTO) 12 08 About Multi Fiber Agreement (MFA) 13 09 About Ready Made Garments (RMG) 14 10 MFA phase out and raise of China 15 11 The consequences for RMG sector in Bangladesh 17 12 Role of RMG 18 13 Problems 20 ...read more.


In 2000 the AFL-CIO fought in vain to stop the Clinton administration granting Permanent Normal Trade Relations status to China, and its demands to improve workers' rights as a condition of China's WTO accession also failed. In 2004 the AFL-CIO called to impose trade remedies (like raising tariffs) on China for being responsible for the disappearance of 2.5 million manufacturing jobs. Recently it joined the Chinese Currency Coalition to press the Chinese government to revalue the yuan. It seems that the AFL-CIO conceives that trade protectionism is a good way to keep jobs. Ironically, when it comes to free trade promoted by the North American Free Trade Agreement (NAFTA) and the WTO, the AFL-CIO does not remain loyal to trade protectionism and oppose NAFTA and the WTO in principle, but was content in trying to append a labour clause on free trade agreements. To identify China as the main winner and the US and EU as losers over the end of the MFA is far from true. The first thing to note is that foreign textile companies account for one quarter of all Chinese export earnings from textile products; they, not Chinese companies, directly benefit from expanding Chinese exports. Chinese companies do reap the remaining three quarters of export earnings, but generally their average profit rates are low, since the majority of them subcontract to foreign brands, only earning a fraction of value added, often just 10 percent2. Importers like Wal-Mart and brand companies pocket the major share of profit. Thirdly, the more China exports textile products, the more it needs to import textile machines from developed countries; Germany is the top textile machine exporting country. In fact China has become the world's biggest textile machine importer, and is one and a half times higher in money terms than the second country-Turkey3 . In the exchange of labour-intensive products (Chinese textiles) for capital-intensive products (US and EU machinery), the latter get most value added. ...read more.


Make individual EPZ on Dhaka; Khulna and Razshahi arrange trade fair. 6. Make a fashion and design: Bangladesh should improve their product as like their exporting country demand. They should reduce import their clothing materials on this way. It can help to increase profit in clothing industry. 7. Make suitable situation for business: To improve this industry government should ensure favorable political, economical and social stability. Conclusion The abolition of quotas, contrary to earlier predictions, has not as yet adversely affected the Bangladesh industry, thanks to the restrictions that still apply to China and Bangladesh's duty-free access to the EU market. Today, Bangladesh continues to be one of the leading exporters to the US and EU markets. The knitwear industry has done particularly well and there has been a shift from producing woven garment to manufacturing knitwear. The full impact of quota abolition will probably not be felt before 2008, when restrictions on China are scheduled to end. Moreover, expected growth in the global market for garments could mitigate the negative impacts on the garment industry in Bangladesh. Garments industry in Bangladesh is a speed up exporting industry. At present this industry only exporting economic growth in Bangladesh. It can a vital role in our economy. About 21 years, in this industry provide us 55% exporting ravine. It can contribute large number in total ravine . although there are number of restriction ten our RMG industry but its Netware sectors economy growth is satisfactory. So we can't manger its future. Reference 1. www.gtz-progress.org/RMG.htm 2. www.amrc.org.hk/5604.htm 3. www.globalmon.org.hk/eng/Post-MFA-era.pdf 4. www.southasianmedia.net/Magazine/journal/8_phases_out.htm 5. www.tradeobservatory.org/headlines.cfm?refID=18887 6. www.econpapers.repec.org/paper/pdbopaper/50.htm 7. www2.dw-world.de/southasia/germany-bangladesh/1.132752.1.html 8. www.bgw-info.net/reports/The_RMG_Sector_of_Bangladesh_and_Its_Female_Workers_Awaiti.pdf 9. www.sg.biz.yahoo.com/060810/16/42olo.html 10. D Bhattacharya - Seminar on Export Competitiveness in Bangladesh Industry 11. MK HASSAN - Applied Economics, 1998 - Taylor & Francis 12. R Afsar - Women in Labor Market in Changing Economies: Demographic 13. K Siddique - CPD Occasional Paper Series, 2003 14. M Murayama - in Post-MFA Era: The Case of India, Bangladesh and Sri Lanka 2006 15. S Halim, A Haq - 2004 - Paper, Department of Sociology. Dhaka University, Bangladesh ?? ?? ?? ?? 1 ...read more.

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