'Made in Bangladesh' no longer?
One of the world's poorest nations faces deep uncertainty about life after Jan. 1, when textile trade quotas end.
DHAKA, BANGLADESH — The workers arrive early to this garment factory in the capital's northern suburbs, most by foot, some from homes miles away. They trickle through the entrances in groups of three and four, hundreds of women in saris or long, flowing kurtas, dozens of men wearing slacks and collared shirts.
Across five factory floors, this plant's employees work 12-hour shifts, assembling shirts, sweaters, and pants for sale in Europe, Canada, and the United States. It's a scene repeated 3,000 times over in Bangladesh, where garment factories account for $4.9 billion in sales and employ a bulk of the country's wage-earning women.
"It's a good job, I'm glad to have it,'' says Shagorika, an unmarried young woman who helps support her family by stitching together sweaters and other knitwear for $60 a month. "If I wasn't working here my brother and sister would have to leave school.''
But the international trade pact that underpins Shagorika's job is about to come unraveled. The Multi-Fiber Agreement, a 30-year arrangement governing import quotas from the developing world, will expire on Jan. 1, leaving Bangladesh and other small countries exposed to crushing competition from China and India.
While free trade will prove a boon to the heavyweights of the developing world, there are fears it will come at the expense of the poorest tier of nations.
Economists aren't sure yet if the change will bring disaster or opportunity to the 1.5 million Bangladeshi garment workers who rely on the industry for survival. Projected job losses vary wildly. One estimate by the United Nations Development Program said as many as a million workers could face unemployment. Some garment industry analyses see short-term job losses offset by long-term growth fueled by the lifting of foreign import tariffs.
"Frankly, nobody knows what's going to happen,'' says Salman Rahman, the deputy chairman of Beximco, one of Bangladesh's largest clothing exporters.
As uncompetitive plants are closed, Bangladesh garment executives say, stronger producers are likely to grow.
One barometer is foreign orders. Exports to Wal-Mart, the American retail giant, grew 18 percent in 2003 to almost $900 million, and are expected to increase by another 30 percent this year.
"I don't think Wal-Mart would be expanding here if things were that bad,'' says Mr. Rahman. "But, again, no one knows.''
The Multi-Fiber Agreement, or MFA, was ratified when the developing world had little clout in the halls of world trade policy. It allowed the world's richest states to set quotas to protect jobs from the lower production costs of rising economies like China's.
As China, India, and others were limited in the amount of apparel they could export to North America and Europe, smaller countries, including Bangladesh, Sri Lanka, Pakistan, and Cambodia filled the vacuum, boosting employment and living standards.
While the impact on Bangladesh of the MFA's expiration is uncertain, it will surely be a bonanza to China. The change is expected to bring 35 million new jobs to the developing world, most of them to China, whose share of the US ready-made garment market is expected to grow anywhere from 28 percent to 66 percent over the next five years.
Garment and textile quotas have cost the developing world as many as 19 million jobs, the World Bank has estimated.
Organizations that promote "fair trade'' between rich and poor nations are happy to see the MFA go, but they point out that other trade barriers remain and new ones are emerging that are barriers to development here.
For example, even while Bangladesh enjoyed the fruits of the MFA through exports to the US and Europe, its products were hit with tariffs far higher than those set for products from rich countries.
The US charged $331 million in tariffs on Bangladeshi exports of $2.4 billion in 2001, according to a March report by Oxfam International. France, which exported $30 billion worth of goods to the US, more than 10 times Bangladesh's total, paid $330 million - $1 million less - in tariffs. These and other barriers will remain in place.
"This can be likened to a system of regressive taxation, in which the poorest people pay the highest rates,'' the report said.
Developing countries have also accused the US and Europe of using antidumping legislation and other regulatory mechanisms to slow imports, often without justification.
There's a lot at stake in America as well as Bangladesh.
The National Council of Textile Organizations says 650,000 US textile jobs, the heart of what's left of the industry, will disappear as a result of the MFA phaseout.
In Bangladesh, newspapers and trade unions have accused the government of lacking a plan to cushion the blow of post-MFA job losses. Private studies predict general strikes and possible street violence in response to rising unemployment.
Many female garment workers are the sole providers for their families. They endure long hours and frequent sexual harassment for meager pay and a sense of independence that women are often denied in traditional South Asian cultures.
"There's no way I could do without this job,'' says Taslima Aktarmuni, 20, who helps pay for the schooling of her three younger siblings. "It's my duty to help my father. There is no one else.''