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The Abolishment of WTO´s Textile Quotas: How is the Textile and Clothing industry in Bangladesh Effected? (Management Project)

On January 1st 2005 the long existing World Trade Organisation’s textile and clothing quotas were abolished. Experts predicted great losses for several developing nations, and foremost Bangladesh. A million jobs were predicted to be lost within the nation, and market shares were expected to be lost to the great winner of the abolishment, China.

During October and November of 2005 research was conducted to obtain the purpose of the master thesis, in other words to examine the effects of the abolishment on the textile and clothing industry of Bangladesh. A qualitative research study was carried out in Dhaka, Bangladesh, to receive another viewpoint of the situation at hand than what most generally known previous research has given. To experience the predicted problem and the effects of the new situation out on the field gives a more reliable source of empirics. Interviews have been conducted with industry owners/managers, international buyers, a professor and organisations to be able to present an overall and generalized view of the situation.

To further be enlightened of the textile and clothing industry at large within the nation, unofficial discussions and exchange of opinions have casually occurred throughout the course of the research. The chosen interview subjects have been carefully selected because they are of highest importance and very influential within the textile and clothing industry of Bangladesh. Among these are Hennes & Mauritz, an international buyer that has worked in Bangladesh during the last twenty years, the Delegation of the European Commission in Bangladesh, working with questions concerning trade between the EU and Bangladesh, and Professor Mustafizur Rahman, both professor at Dhaka University and also Research Director at the Centre for Policy Dialogue, who has great knowledge and influence concerning questions about the abolishment of the textile and clothing quotas in Bangladesh.

In addition to the previously mentioned individuals exchange of opinions, discussions and interviews have been held with other individuals such as with Moniruzzaman, Managing Director at Pinnacle Texcott, as well as Mohammad Ali Khokon, Managing Director at Maksons Group, several times elected director of the Federation of Bangladesh Chambers of Commerce and Industry, FBCCI, as well as candidate for the parliament in the following election in 2006. These are some of the persons not presented in the empirics but that have greatly contributed to the researchers overall knowledge.

The predicted scenario of a million lost jobs and a great loss in market shares for Bangladesh has been refuted and the abolishment has in some areas even improved Bangladesh’s situation on the newly opened global market. The individuals interviewed have generally supported the abolishment and most of them see the development as an opportunity for the textile and clothing industry of Bangladesh. Naturally they all sense a more or less threatening situation ahead, however the nation cannot fully flourish if it is under constant protection and therefore they feel that the abolishment was a positive development. Bangladesh is very dependent upon the nation’s textile and clothing industry since it is the largest one in the country, therefore overall heavy actions are taken to benefit from the new situation.

There are different outlooks about the future, in particular after the total abolishment of all quotas in 2008. Nevertheless most interviewed individuals predict a bright and promising future for the textile and clothing industry of Bangladesh.
Source: Södertörn University College
Author: Bylund, Sandra | Eriksson, Martina

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