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Phasing out MFA beyond 2005 wont affect apparel sector

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November 22, 2000 

Dhaka--(UNB)- Industries Minister Tofail Ahmed said phasing out of Multi-Fibre Arrangement (MFA) beyond 2005 would not affect the apparel sector if Bangladesh gets duty-free market access to the developed and developing countries.

He was addressing a seminar on “Beyond 2000: Impact of MFA phase-out on RMG sector of Bangladesh” at Sonargaon Hotel yesterday.

BGMEA organzed the seminar, first of a series of three on contemporary issues, in connection with the BATEXPO-2000 apparel exhibition.

Pro-vice-chancellor of North-South University Hafiz GA Siddiqi presented the keynote paper on the subject.

Gradual elimination of quota restrictions on export of textile and clothing is the main feature of MFA, which will be phased out on 31 December 2004, making world apparel market free for all from 2005.

The minister said Bangladesh would experience mixed result in post-MFA period. He said both the government and the 3000 textile and RMG entrepreneurs could equally claim a credit for the tremendous progress so far achieved in this sector.

He told the function that the government of the Prime Minister Sheikh Hasina had so far realized more than 50 demands and proposals of BGMEA to make the sector vibrant.

At the same time, entrepreneurs have made relentless efforts to diversify their products, explore new markets and apply their experiences. As a result, the RMG export proceeds that were $ 2.5 billion in 1995-96 shot up to $ 4.5b last year and it will cross $ 5b this year.

“If the government continues this support and the entrepreneurs devote themselves to setting up forward-linkage industries, we will be able to maintain growth in the sector beyond 2004.”

Stressing the need for a joint program of the government and entrepreneurs, Tofail said, “We are surviving despite many odds derived from regional and international trade policies and we will definitely survive in future also.”

Listing some measures to be taken by entrepreneurs to continue the growth after 2004, the Minister said quality and productivity should be improved and products must be cost-effective.

He urged the exporters to introduce IT facilities, including B2B and B2C, to attract buyers easily. Anyway local value addition, which is now about 70 per cent for knit garments and 10-12 percent for woven garments, should be increased through setting up sufficient forward- linkage industries.

He said labor, gas, electricity, transportation and business costs are cheap in Bangladesh. “So, if you add more value, it would be cheaper than imports which will yield maximum dividends in open competition.”

He noted that the European Commission had declared to allow Bangladesh duty-free access for all exportable. “Now, our target should be to earn equal declaration from USA, Canada, Japan, and the other developed and stronger developing countries.”

He said many developed countries were protecting their industries maintaining high import tariffs “but we failed due to pressure from IMF and the World Bank in early 90s. This time, we should not be loser.”

The seminar was also addressed by Commerce Secretary Ghulam Rahman,BGMEA President Anisur Rahman Sinha, BGMEA Vice President Alhaj Khalilur Rahman and Benajir Ahmed.

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