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Bangladesh is likely to graduate out of the group of least developed countries (LDCs) by 2024. While this represents a major transition in terms of its development, demonstrating the country’s impressive socio-economic achievements, it also gives rise to concern about potentially sizeable costs due to the resulting loss of access to various support...
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... would imply an average annual export growth rate of close to 12 per cent in comparison with that of 6 per cent for world merchandise exports. In the process of export expansion, RMGs emerged as a flagship export product for Bangladesh, generating export receipts from about $1 billion in 1990 to above $30 billion in 2018 ( Figure 1). While so many countries, particularly those in sub-Saharan Africa, failed to move export production away from primary commodities and other mineral resources to manufacturing, Bangladesh exhibited dramatic shifts in its export composition in which the share of erstwhile traditional exports (such as raw jute and jute goods, tea, leather and frozen fish) fell from more than three-quarters to just about 10 per cent to accommodate the growing relative significance of RMGs from virtually nothing to more than 80 per cent (Figure 2). ...
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... analysis of the data at a more disaggregated level shows that Bangladesh's single most important (in terms of export revenues generated) export item at HS 8-digit level is HS 61091000 (T-shirts, singlets and other vests of cotton). Almost three-quarters of all export earnings ($3.8 billion) from this item are due to the EU ( Figure 10). For this particular product, Bangladesh has an EU market share of about 25 per cent. ...
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... the largest woven garment -men's or boys' bib & amp; brace trousers, breeches and shorts of cotton (HS 62034200) -the single most important individual market is the USA, accounting for about 30 per cent of all exports. However, the combined EU Member States' share is far greater at about 50 per cent of Bangladesh's export earnings from this product ( Figure 11). The other major RMG exports to the EU markets are men's or women's shirts, jerseys, pullovers, shorts made of cotton and fibre, etc. Annex Table A4 provides a list of the top 20 Bangladeshi RMG items (at the Combined Nomenclature (CN) 8-digit level) exported to the EU and their respective market shares. ...
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... other major RMG exports to the EU markets are men's or women's shirts, jerseys, pullovers, shorts made of cotton and fibre, etc. Annex Table A4 provides a list of the top 20 Bangladeshi RMG items (at the Combined Nomenclature (CN) 8-digit level) exported to the EU and their respective market shares. Figure 12 depicts the growth dynamics of Bangladesh's individual HS 6-digit apparel Source: Authors' presentation using data from the EPB. . Countries' share in Bangladesh's woven garments (HS 62) exports (%) Figure 10. ...
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... 12 depicts the growth dynamics of Bangladesh's individual HS 6-digit apparel Source: Authors' presentation using data from the EPB. . Countries' share in Bangladesh's woven garments (HS 62) exports (%) Figure 10. Partners' share in Bangladesh's exports of HS 61091000 ...
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... the EU, it is estimated that the existing level of exports is short of an additional $11.3 billion potential, of which more than 90 per cent is apparel. The potential and actual exports of apparel products are summarised in Figure 13 where the numbers in parenthesis show the proportion of the actual exports as a percentage of actual plus unexploited export opportunities. The highest absolute difference between potential and actual exports is for Germany, leaving room for additional export earnings of $2.2 billion. ...
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... per cent) worth of clothing items were sourced from extra-EU suppliers. China, the global export leader, captures about one-quarter of the market share ( Figure 14); it exported $39.3 billion in 2017. Bangladesh is the second largest exporter, having a 12 per cent market share. ...
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... over the next 7 years it fell by almost 9 percentage points. A close look at Table 1 and Figure 15 reveal Bangladesh's capturing of much of China's declining market presence. During 2000-10 Bangladesh's market share rose from about 3.5 per cent to 6.5 per cent, but then it accelerated further to increase to more than 12 per cent, i.e. a 5.5-percentage point rise in 7 years. ...
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... Figure 16 shows, between 2001 and 2010, Bangladesh's market share in woven garments (HS 62) virtually stagnated. After allowing single transformation, the market share of woven products expanded rapidly: from just above 4 per cent in 2010 to more than 10 per cent in 2017. ...
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... allowing single transformation, the market share of woven products expanded rapidly: from just above 4 per cent in 2010 to more than 10 per cent in 2017. Because of strong domestic backward linkages, ROO did not appear to be a major problem for knitwear and thus Bangladesh The market shares of major extra-EU partners for their respective top exporting items at HS 6-digit level are provided in Figure 18. Bangladesh's most important 5 and 20 products account for 22.2 per cent and 18.5 per cent of EU imports in the same products respectively. ...
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... textile and clothing sector attract relatively high MFN tariffs, and therefore Bangladesh has substantially benefited from the EBA arrangement for LDCs. An analysis of EU tariff structures ( Figure 19) shows that about one-quarter of EU tariff lines at CN 8-digit level have an MFN duty rate of zero per cent (i.e. 25 per cent of all products imported by the EU provide duty-free access to suppliers from all countries). Another 4 per cent are subject to specific duties only. ...
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... resultant loss would be higher than $2 billion in the unlikely case of Bangladesh facing the MFN tariff rates. It is estimated that the forgone export receipts from knitwear would be greater than those from its woven counterparts ( Figure 21). Under Standard GSP, while the export loss due to woven garments would be lower than $700 million, the comparable figure for knitwear would be close to $1 billion. ...
Citations
... Technical textiles, eco-friendly garments, and apparel products can help Bangladesh to capture the premium market in the world. Research also indicates that investing in innovative design and sustainable practices may help the RMG sector to keep its leading global position (Gu et al. 2021;Razzaque & Rahman, 2019). On the other hand, market diversification is required to enhance RMG products in different geographical locations such as the Middle East, Latin America, and Africa to keep its leading position in international markets (Raihan, 2020). ...
Background: The Ready-Made Garment (RMG) industry is a vital contributor to Bangladesh’s economy, generating 8.29% export revenue, and employment of over 5 million workers. This sector plays a significant role in poverty reduction and gender empowerment. However, challenges such as unsafe working conditions, low wages, environmental issues, and inadequate technological innovation persist.Purpose: The study aims not only to explore the RMG sector’s impact on Bangladesh's economy but also to highlight the challenges and recommendations for sustaining this sector’s global competitiveness. Design/Method/Approach: A mixed-method approach was used, integrating a systematic literature review (SLR) with the PRISMA model and a comparative analysis to obtain actionable insights. Findings/Result: The RMG sector has made achievements like workers’ pay scale and green factory initiatives, but several significant gaps such as workers’ training, export diversification, and technology adoption. Additionally, major global concerns such as environmental sustainability, excessive water consumption, and discharge of chemicals need to be addressed. Conclusion: The contribution of this sector to Bangladesh’s economy is remarkable but must address challenges in the RMG sector. Strategic actions are necessary to ensure long-term competitiveness and growth. Originality/value (State of the art): This review paper consolidated the RMG sector’s contribution, challenges, and future directions. It also highlighted actionable recommendations for export diversification and how to address the challenges. Keywords: Gross Domestic Product (GDP), Ready-Made Garment (RMG), Green Factory, environmental sustainability, technological innovation
... The Heckscher-Ohlin theory claims that a country's comparative advantage depends on relative factor endowment across nations, and that trade affects relative factor prices both within and across nations [11]. The United States (US) and the European Union (EU) are two of the biggest Ready-Made Garments (Here, RMG comprises Bangladesh's main ten trading knitwear (Harmonized System-HS 61) and woven wear (HS-62) markets for Bangladesh [12]. Bangladesh is the second largest exporter of these products to both the US and EU markets [13]. ...
This paper conducts a Revealed Comparative Advantage (RCA) examination for RMG products of Bangladesh and compares it with prime contenders of Bangladesh. In this paper, seven nations have been picked as prime contenders of Bangladesh: China, Hong Kong, India, Pakistan, Srilanka, and Vietnum. Mainly, the RCA has been investigated with the assistance of the Balassa Index for the two significant fare goals of Bangladesh's attire-the USA and the European Union (EU). The reason is to investigate the effect of the US-GSP suspension on Bangladesh just as how it impacts Bangladesh's assembling areas and the fare of RMG merchandise. The RCA breaks down the degree of fare rivalry among Bangladesh and its significant rivals. The study applies the Balassa Index. It claims that the level of competition among significant contenders escalates with the usage of the US-GSP prerequisites to get the GSP facilities in the US market. This examination shows a period series investigation of RCA of 18 years, beginning from 2000 to 2018, for Bangladesh's exports to the EU and the US markets. The findings from this paper propose that Bangladesh has a close favored position over other major contending countries in the USA and EU markets for the main ten RMG things. This result shows that Bangladesh's RMG part is more significant in the EU market than in the USA market.
... The textile sector is recently known as the most contaminating territory of the economy (EEA, 2022). The volume of textile production and trade significantly influences the economies of some countries including Turkey and Bangladesh, and investigating their environmental activities can lead to help policy decisions (Razzaque M. A., & Rahman J, 2019). ...
Objectives: This study investigates the impact of European Union (EU) environmental policies on Bangladesh's and Turkey's textile industries. It aims to identify the challenges both nations face in implementing these regulations and explore opportunities for sustainable development by comparing their approaches. Theoretical Framework: The research is grounded in environmental governance and industrial sustainability principles, emphasizing the interplay between regulatory frameworks and economic practices in developing countries. Method: A mixed-methods approach combines an extensive literature review with analyzing country-specific data from existing studies. This method provides a comprehensive understanding of the challenges and strategies employed by both nations. Results and Discussion: Findings reveal that compliance with EU regulations is challenging for Bangladesh and Turkey due to their reliance on textile exports. With its diversified economy, Turkey faces high financial requirements, while Bangladesh struggles with rapid population growth and unplanned industrialization. Common issues such as air and water pollution, along with inadequate waste management systems, are prevalent in both contexts. Differences emerge in regulatory frameworks and resource management, influencing their respective adaptation strategies. Research Implications: The study highlights the need for customized policy interventions and international collaboration to support compliance efforts in both countries. Enhanced environmental practices can foster the achievement of Sustainable development Goals (SDGs) while ensuring economic growth. Originality/Value: This research offers a comparative analysis of two major textile-exporting nations, providing fresh insights into balancing economic development with environmental responsibilities in the global textile sector.
... Bangladesh's graduation from the LDC group will impact export-led economic growth, while arguably, the high concentration of the export basket puts it at a higher risk of potential trade volatilities (Razzaque 2018a). If the export basket concentration remains the same in the post-LDC graduation period, the impact of the graduation would be translated through the impact on the RMG sector (Razzaque and Rahman 2019). This article estimates the impact of the LDC graduation on Bangladesh's sectoral (RMG) and total exports, as well as potential welfare losses. ...
Bangladesh will graduate from the LDC list by 2026. Currently, Bangladesh's exports of readymade garments (RMG) benefit from international support measures which allow preferential trade in major export destinations, such as the EU. After graduation, Bangladesh's exports, particularly RMG, will face competition from mega trading blocs, such as RCEP and CPTPP. This article employs the GTAP model to estimate the impact of Bangladesh's graduation from the LDC category and how mega FTAs are likely to affect Bangladesh's exports and potential welfare. The model also considers the scenarios of either United States or the UK or both joining the CPTPP. The model results show that Bangladesh's graduation will lead to a fall in GDP and RMG exports by 1.53% and 11.8%, respectively. The negative impact is magnified when we factor in the mega-trading blocs. Further negative impacts are observed when either United States or the UK or both join the CPTPP.
... The duty-free market access of Bangladesh under the EBA initiatives of the EU aided to expand its market in these countries. Besides, the derogation of EU rules of origin (RoO) in 2011 allowed a single transformation for LDC clothing exports under EBA, which greatly aided Bangladesh's performance to boost apparel exports (Razzaque and Rahman, 2019). It generated a reinvigorated supply from the woven garment sector, raising Bangladesh's share in EU apparel imports. ...
Over the past decades, the European Union (EU) has emerged as an indispensable trade and development partner for Bangladesh. The EU is by far the country’s largest export market, taking almost half of Bangladesh’s exports. Taking advantage of the Everything But Arms (EBA) initiative, which provides preferential duty-free and quota-free market access for goods originating from the official category of Least Developed Countries (LDCs), Bangladesh’s combined exports to the EU expanded rapidly from just US23.2 billion in 2021/22. In value terms, more than 80 per cent of all Bangladesh’s exports that receive any tariff preferences is obtained from European markets. Bangladesh has been the single largest beneficiary of EU Generalised System of Preferences (GSP) schemes.
Along with its contribution to trade, the EU has been one of the most important development partners as well. It provides generous budget support to the government of Bangladesh, supports numerous social and physical infrastructure projects, and is a critical source of technical assistance in a wide variety of areas. Over the past five years, the cumulative official direct assistance (ODA) from EU institutions and individual EU countries amounted to 3.5 billion, accounting for about a quarter of all such flows into Bangladesh. The FDI stock in Bangladesh due to the EU is more than 12 per cent of the total such stock.
Emerging challenges affecting Bangladesh-EU trade and economic relations:
Bangladesh still has huge export potential in the EU as it is estimated that currently only 60 per cent of export potential is utilized. However, the nature of trade relations with the EU, or, more precisely, Bangladesh’s dependence on EU trade preference, is now set to come to terms with other major developments that will require a profound transformation of the current trade and cooperation regime.
... In 2019, the global textile market size was valued 961.5 $USbn; it is projected to grow by 4.3% (compound annual growth rate, without taking the effects of COVID-19 into consideration) by 2027 (InkWorld, 2020). Textile imports from Bangladesh to the EU have trebled from 2008 to 2015 (European Commission, 2020c), with positive reports of job gains especially for women working in the textile industry (Razzaque and Rahman, 2019). At the back of these gains, reports of unsafe working conditions not only pose a threat to the fashion industries, but also undermine the gains achieved from trade liberalisation. ...
Successful implementation of the Sustainable Development Goals (SDGs) requires world countries to account for actions that inadvertently generate negative impacts on other countries. These actions/effects are called 'spill-overs', and can hinder a country's SDG progress. In this work, we analyse negative social spillover effects, focussing specifically on the occupational health and safety aspects of workers in textile supply chains. We select two indicators: fatal accidents and non-fatal accidents that take place in global supply chains for satisfying consumption of textile products (such as clothing, leather products) by European Union (EU) countries. Specifically, we scan global supply chains originating in countries outside of EU for meeting the demands of its citizens. To this end, we employ a well-established technique of multi-regional input-output analysis, featuring information on 15,000 sectors for 189 countries, to scan international supply chain routes that are linked to consumption of textile products by EU countries. Our findings suggest that Italy, Portugal are collectively responsible for about 80% of both fatal-and non-fatal accidents that are attributed to the EU's consumption-based footprint. These findings not only call for a need for coherent SDG policies that consider spillover effects, but also the need for these effects to be included in EU's strategic instruments and policy-related tools.
... Consequently, market access conditions in most important export destinations will become more stringent. Several studies predict that Bangladesh will see a significant loss in export earnings (UNCTAD, 2016;Razzaque and Rahman, 2019;Rahman and Bari, 2019). By signing bilateral and multilateral FTAs with major partners, Bangladesh could preserve market access conditions and thus not disturb export flows and competitiveness in the post-graduation period. ...
... Bangladesh currently enjoys duty-free quota-free access in the European Union and the United Kingdom under the EU's Everything But Arms (EBA) initiative, having a preference margin of around 12% for most exporting apparel items (Razzaque and Rahman, 2019). Thus, the impact of an FTA with these countries is expected to be zero. ...
... This is because there are some products for which Bangladesh could not satisfy the rules of origin criteria and thus ended up paying tariffs. According to recent data, the preference utilization rate of Bangladesh in the EU is almost 97% (Razzaque and Rahman, 2019). This implies that the country pays tariffs on the remaining 3% of its exports to the EU (including the UK). ...
... The report concludes, "the country has to prepare itself over the next few years to counter these losses". In addition, a paper of the researcher from the Policy Research Institute, Bangladesh (Razzaque & Rahman, 2019) analyzes the impact of trade with the EU, including a US$1.6 billion decline in exports and the possibility of China, Cambodia, India, Turkey, and Vietnam increasing their exports instead. Besides, in a paper written by Bangladesh government officials, it was pointed out that "a continuous effort should be given by the government by gaining experience from another developed country to reduce risk factors to ensure sustention of current progress" (Rahman, Sony, Rubel, Alam, & Liza, 2020). ...
... The impact of tari hikes after graduation will potentially undermine Bangladesh's already weakened comparative advantage. Utilising a partial equilibrium model, as in Razzaque and Rahman (2019), the likely consequences on exports due to the erosion of LDC preferences are estimated using 669 HS 8-digit products that were exported to China in 2018. The results suggest an adverse e ect on exports to the tune of 12.5 per cent (i.e., $122.7 million) ( Table 7.8). ...
Over the past couple of decades, the People’s Republic of China has emerged as a global economic superpower having achieved high economic growth sustained for a very long period of time and in the process becoming the world’s largest merchandise exporter. Its rapid structural transformation and development transition to an upper-middle-income country accompanied by a fast-growing and massive urban middle and affluent consumers have also turned it into a major global market, accounting for more than 10 per cent of world imports. For suppliers across global economies, China presents an unprecedented opportunity for export expansion.
Along with its growing economic and political significance, China has also started proactive engagements with many countries through investment activities. In recent years, advancing connectivity to facilitate trade and promote economic cooperation arrangements has become a priority agenda for Chinese policymakers. Through the Belt and Road Initiative (BRI), China’s state-owned enterprises have undertaken trade-related infrastructure development projects at continental scales. At the same time, China’s private financers are taking a hands-on investment approach in many developing countries to look for new trading opportunities created through infrastructural development and attracted by scal and nancial incentives offered to foreign investors.
China is already the largest trading partner of Bangladesh. However, this trade has been overwhelmingly dominated by Bangladesh’s imports from China. Chinese products account for more than one- fth of Bangladesh’s total imports. On the contrary, China’s share in Bangladesh’s exports accounts for only about 2 per cent. Therefore, exploiting the Chinese market in expanding exports constitutes one important policy consideration. Bangladesh’s economy has also expanded considerably through robust economic growth of the past decade and the medium-term growth momentum looks quite solid. Geographical proximity, competitive labour costs, a reasonably sizeable manufacturing production capacity in the country vis-a-vis rising production costs in China imply that there exists an important opportunity for attracting Chinese investors in Bangladesh and building a productive bilateral economic partnership.
This chapter analyses emerging patterns and trends of Bangladesh-China trade and economic relationship and considers some options for shaping and strengthening the partnership in a way that should help Bangladesh exploit the market prospects in China and expand domestic supply-side capacity utilising Chinese investments. The chapter highlights various options for Bangladesh’s engagement with China in securing a bene cial bilateral trading arrangement in the path to LDC graduation and beyond. Having discussed various aspects of the Belt and Road Initiative, this chapter concludes that a deeper economic engagement based on judicious selection of investment projects and their e ective implementation will boost productive capacities in Bangladesh.
The extent of this research aims to demonstrate a Land Use/Land Cover (LULC) change over a coastal-industrial area of Sitakunda, part of Chittagong region in Bangladesh. Its reference information has included important drivers for this industrial area of 4.00 km2, that highlight its suburban growth that uncontrollably has disaggregated the rural landscape, in a period ranging from 2009 to 2022. Our geospatial analysis has started with the observation of the BM Container Warehouse, that has been recently interested by a dreadful fire.
