Women's Employment - United Nations Research Institute for Social ...

Female employment under export-propelled industrialization
With the phasing out of the MFA and the elimination of quotas
on these major categories of exports, some of the traditional RMG
exporters, such as Bangladesh, are expected to face serious competition
from a number of newcomers, which, under the MFA, faced restricted
entry in the US and Canadian markets (Blackhurst et al., 1995).
Bangladesh’s RMG firms currently import a large proportion of their
raw materials (grey fabrics) from countries such as China, India and
Thailand under back-to-back L/Cs. In a quota-free environment,
however, these countries may increase exports of finished apparel to
North American markets. Whether Bangladesh’s RMG sector will be
able to withstand the challenge from these countries in the post-MFA
period is thus an issue of critical significance for the future of the
industry. The key issue here will be the competitive strength of
Bangladesh’s textile sector in general, and its RMG sector in particular.
If we juxtapose the phase-out programme on the structure of
apparel exports from Bangladesh, we find that most items of export
interest are to be integrated into the WTO in the last year of the phaseout
(2004). Bangladesh thus has about four years to prepare for the
post-MFA trade regime.
Other market access problems may also threaten the future
performance of Bangladesh’s RMG sector. For example, Bangladesh’s
exports enjoy preferential access in many European markets under
the EC’s Generalized System of Preference (GSP) schemes. These
provide Bangladesh access to the EC market at zero tariffs. It is notable
that, although substantial across-the-board reductions in tariff rates
were negotiated in the Uruguay Round, reductions on textiles and
apparel were relatively shallow. For example, tariff rates on imports
of textiles and apparel by EC countries have remained relatively high,
at about 12.5 per cent. Preferential treatment under the GSP allows
EC importers to claim a duty rebate equivalent to 12.5 per cent of
import value on imports of garment from Bangladesh. In recent years
this preferential treatment has contributed to robust growth of
Bangladesh’s apparel sector through substantial market expansion
in the EC market. The EC accounts for about 35 per cent of
Bangladesh’s global exports of apparel.
However, problems of market access recently faced by
Bangladesh indicate that such facilities cannot be expected on a
guaranteed basis. For example, access to the EC’s GSP scheme is
subject to compliance with “rules of origin” (ROO) requirements.
Under these requirements, a two-stage transformation is required for
woven RMG and, for knit RMG, a three-stage transformation (cotton
to yarn, yarn to fabric, fabric to RMG) is required. Since Bangladesh’s
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