JBS Vol 02. Num 2. 2000 - WORLD TRADE ORGANIZATION AND THE READYMADE GARMENT INDUSTRY OF BANGLADESH: A CRITICAL ANALYSIS

The conversion of GATT into WTO has changed the global trading environment remarkably. Particularly, the
phasing out of the Multi-fiber Arrangement (MFA) and abolition of GSP is a serious challenge to many developing
countries. Bangladesh has been exporting RMG successfully over two decades with the lowest labor cost in the
region. It also has substantial experience in subcontracting with foreign buyers. With the abolition of quota and
GSP, the trading environment has become fiercely competitive. Bangladesh, whose economy is heavily dependent
on this sub-sector, will now have to compete against textile giants like China and India. Analysis of the internal and
external environment suggests eliminating inefficiencies and irregularities from the country’s production and
exporting processes. This paper found strong arguments for forward and backward integration, as well as the need
to penetrate into new markets, diversify into new products and relocate production in new areas.