b. What did the end of the quota system mean for the country?

Production of ready-made garments (RMG) has been one of the most important sectors of
Bangladesh's economy as they had been dependent heavily upon exports of textile products to
generate income, employment and economic growth, where about 1.6 million workers were employed
or 1/3rd of its industrial labour force.
The quota system in the Bangladesh means the planned elimination of the quotas under the Agreement
on Textiles and Clothing which will alter the competitiveness of various exporting countries.
Bangladesh relies severely on textile and clothing exports and is potentially very helpless to this
change in competitiveness. As assessed on quota restrictiveness, export and an analysis of its supply
constraints, the assessment concludes that Bangladesh could face significant pressure on its balance of
payments, output, and employment when the quotas are abolished.
The Multi-fibre Arrangement (MFA) in global trade in apparels and textiles was phased out in
December 2004. South Asian countries major concern was to prevent large-scale job losses due to
liberalization and globalization. It was apprehended that the RMG (Ready-made garments) sector of
smaller countries especially Bangladesh will be adversely affected by losing a huge number of jobs,
will face high competition from its low-cost competitor countries and will experience adverse impact
due to its high dependency on the United States and the European Union markets for its RMG
products. Despite the concern and fear of negative impact, the outcome of quota removal of RMG
sector in Bangladesh appears with positive trends along with the substantial increasing in the rate of
export amount, jobs and industries and GDPs growth. In 2010, the sector keeps around 20 percent
GDP growth of the country.