China may eat into Bangladesh's RMG market in USA & EU

05 Jul '07

2 min read

A recent IMF publication entitled 'Bangladesh: Selected Issues' has underlined the apprehension that Bangladesh's RMG exports may face tougher competition in its two largest markets — USA and EU — once safeguard restrictions on China expires in 2008.

IMF's evaluation is based on the dwindling market position of Bangladesh's RMG exports in Canada where there are no limits on China's entry. Bangladesh's share of the overall Canadian market has declined from 7.4 to 6.9 percent over the past two years.

It also poses Vietnam's appointment to the WTO in January 2007 as a challenge for Bangladesh as now, the former has access to large international markets to export its RMG.

The evaluation, prepared by IMF Staff team and received yesterday, states that though Bangladesh has proven its time-tested export competitiveness in major garment markets, it has certain drawbacks that pull its performance down.

Major constraints on the Bangladesh garment industry is low level of labour skills followed by generally poor infrastructure, especially movement of goods through the ports. The recent labour unrest that plagued the country's garment sector also proved to be potential threat to the industry. Bangladesh government must seek to better working conditions of labours and raise safety standards.

Aside from addressing these constraints, the report said Bangladesh must actively explore new markets to export its garments. The RMG industry in Bangladesh is made up of 3,486 manufacturers and accounts for 76 percent of total foreign exchange earnings. It employs about 180,000 managers and 1.5 million workers, of whom 1.2 million are women.

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