The end of textiles quotas: A case study of the impact on Bangladesh

Yongzheng Yang and Montfort Mlachila

Journal of Development Studies, 2007, vol. 43, issue 4, 675-699

Abstract: This paper assesses the effects on the Bangladeshi economy of phasing out textile and clothing quotas by industrial countries. Bangladesh relies heavily on textile and clothing exports and is potentially very vulnerable to the abolition of the quotas. We used up-to-date information on quota prices for Bangladesh to evaluate its competitiveness in a quota-free world, and subsequently incorporate the quota price information in the GTAP model to simulate the effects of quota phase out on Bangladesh. We also examine in detail the supply constraints facing Bangladesh's textiles and clothing industries. Based on this analysis, we conclude that without accelerated structural reforms Bangladesh is likely to face significant pressure on its balance of payments, output and employment in the aftermath of quota removal.

Date: 2007
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DOI: 10.1080/00220380701259939

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