1974 the Multi Fibre Arrangement (MFA) and the Daewoo of South Korea Textile industry in Bangladesh

t-shirt quality checking in ready made garment factory of bangladesh

starting in 1974 multi fibre arrangement (mfa) in north american market ensured trade in textiles , garments remained regulated in world. among other things mfa set quotas on garments exports newly industrialising countries of asia, had exceptions, notably state of bangladesh. entrepreneurs quota-restricted countries south korea began quota hopping seeking quota-free countries become quota-free manufacturing sites. export-oriented readymade garment industry emerged @ time. daewoo of south korea entrant in bangladesh, when established joint venture on 27 december 1977 desh garments ltd. making first export oriented ready-made garment industry in bangladesh. after 1 year in 130 desh supervisors , managers received free training daewoo in production , marketing @ daewoo s state-of-the-art ready-made garment plant in korea, 115 of 130 left desh garments ltd. , set separate private garment export firms or began working other newly formed export-oriented rmg companies new garment factories in bangladesh higher salaries desh garments ltd offered.

global restructuring processes, including 2 non-market factors, such quotas under multi fibre arrangement (mfa) (1974–2005) in north american market , preferential market access european markets, led emergence of export-oriented garment industry in bangladesh in late 1970s. uncertain phase out of mfa meant bangladeshi rmg industry. however, surpassing doubts, industry continued succeed , dominate on global level.

the garment industry in bangladesh became main export sector , major source of foreign exchange starting in 1980, , exported $5 billion usd in 2002. in 1980 export processing zone officially established in @ port of chittagong.

by 1981, 300 textile companies, many small ones had been denationalized returned original owners. in 1982, shortly after coming power following bloodless coup, president hussain muhammad ershad introduced new industrial policy (npi), significant move in privatization process, denationalized of textile industry, created export processing zones (epzs) , encouraged direct foreign investment. under new industrial policy (npi) 33 jute mills , 27 textile mills returned original owners.

in 1985 , canada imposed import quotas of own, no international agreement, on bangladeshi textiles. however, bangladesh able meet demand every quota each year , able negotiate higher quotas subsequent years.

the export of ready-made garments (rmg) increased $usd 3.5 million in 1981 $usd 10.7 billion in 2007. apparel exports grew, initially, ready-made garments rmg industry not adequately supported growth , down domestic supply chain (e.g., spinning, weaving, knitting, fabric processing, , accessories industries).

from 1995 2005 wto agreement on textiles , clothing (atc) in effect, wherein more industrialized countries consented export fewer textiles while less industrialized countries enjoyed increased quotas exporting textiles. throughout 10-year agreement, bangladesh’s economy benefited quota-free access european markets , desirable quotas american , canadian markets.

as above table shows, market shares bangladeshi textiles in usa , both textiles , clothing in european union have changed during time period of atc.

until fy 1994, bangladesh s ready-made garments (rmg) industry dependent on imported fabrics - primary textile sector (pts) not producing necessary fabrics , yarn.

since 1990s, knit section expanded producing , exporting shirts, t-shirts, trousers, sweaters , jackets. in 2006, 90 percent of bangladesh s total earnings garment exports came exports united states , europe.

although there concern, noted in imf report, wto s multi fibre arrangement, agreement on textiles , clothing (atc), phase-out shut down textile , clothing (t&c) industry, bangladesh textile sector grew tremendously after 2004 , reached export turnover of us$10.7 billion in fy 2007. bangladesh expected suffer ending of mfa, expected face more competition, particularly china. however, not case. turns out in face of other economic giants, bangladesh’s labor cheaper anywhere else in world. while smaller factories documented making pay cuts , layoffs, downsizing speculative – orders goods kept coming after mfa expired. in fact, bangladesh s exports increased in value $500 million in 2006.

textile exports bangladesh united states did increase 10% in 2009.