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

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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


Executive Summary

More than eighteen month ago, on January 1, 2005, the Multi Fiber Arrangement (MFA), which had governed world trade in textiles and clothing for thirty years, came to an end. With the expiry of MFA, the quota system and trade restrictions, initially meant to protect the industry in developed countries, were lifted, opening the door to free competition for all.

In the post-MFA era, large competitive countries like China and India were expected to take full and unrestricted advantage of their low production costs and impose fierce competition on smaller producing countries that had developed their ready-made garment (RMG) industry based on access to quotas rather than on their international competitiveness.

Since January 2005, the market is no longer restricted by quotas. It was generally predicted that after the end of the MFA, countries that had been restricted by quotas would be able to take the full advantage of their competitive position, while those that had been less restricted by quotas might face difficulties in maintaining their current market share. In the long run, it is expected that smaller producers like Bangladesh will find it difficult to compete with integrated supply chain, service standards and economy of scale (savings on volumes) that the larger producers like China or India can offer, unless they take serious measures to improve their competitiveness.


Introduction

In the post-MFA period, Bangladesh has actually been able to increase its exports. In 2005 (January-December), it exported $6.9 billion worth of RMG products compared to $6.2 billion in 2004 (January-December), thereby registering a growth of almost 11%. This was mainly due to the knitwear industry, exports of which increased by about 27% during the same period, while that of woven garments slightly decreased. According to some estimates, 400 new factories have been registered and 65,000 new workers recruited after the ending of MFA. Even if these factories are not all effectively operational, this growth in investment and employment is real.

In 2004, Bangladesh was the tenth largest garment supplier to the US and its share of the market was 2.8% compared to China's 16% (the largest supplier) and India's 3.4% (seventh largest supplier). In 2005, Bangladesh increased its exports to the US market by around 21% both in terms of volume and value. As a result of increased exports, Bangladesh was able to raise its share of the US market by almost 14% in terms of volume and 12% in terms of value in 2005. The performance of Bangladesh compares quite favorably with other Asian countries.


Origin of the Study

In our BBA program Introduction to Business is one of the major and important subjects. Topic of this report is related to this subject. Such as, analyzing a financial condition, understanding business terms, study global market, global business policy and its impact on countries etc.

So, with a view to teach us global business standard our course teacher gave us a topic according to current business condition. This is how we involve in doing this report.


Objective of the Study

Objective of doing this report is to learn how to make a report properly. Then to learn global business terms, business policy etc. Trough doing this report we can learn some of our lesson practically & more effectively. There are some topics which is related to our subject.

So, this is not only a report also a part of our lesson and a way of learning business.


Methodology of the Study

While doing this report we need to study a lot. We browse lots of web pages, read articles from newspaper, books, study annual reports related to the topic. Also we discussed with our course teacher, senior students and our classmates.

We analyze the information that we get from web pages, then put the right information here. In our group we divide the topics among our group members. So, it becomes easier for us to do the report properly and effectively.


Limitations of the Study

It was boring and disturbing when we were working in the lab. No Antivirus protection in the lab computer. So, when we finished our report and copy it to pen drive its not showing the documents. More than 5-6 times we faced the problem.

Join now!

Load shedding was another bothering things that happened after some moments again and again. So, in the middle of our work we need to stop working.

We cant provide sufficient graphs and statistics inside. Because we didn’t get enough resource from the web related to our topics.


About WTO

The World Trade Organization (WTO) is an international organization designed to supervise and liberalize international trade. The WTO came into being on January 1, 1995, and is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947, and continued to ...

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