Case 4: Disaster in Bangladesh 1. From an economic perspective, was the shift to a free trade regime in the textile industry good for Bangladesh?

Yes it was. Before 2005, the Bangladesh export market was regulated by a quota, meaning that there was limitation on textile products exports from Bangladesh.
When the free trade regime was introduced, experts predicted a collapse of the Bangladesh’ textile industry. However, the opposite happened. Bangladesh’s export market continued to grow, even while the rest of the world struggled with an economic crisis, making it the largest export industry in the country.

The employment and economic growth in Bangladesh depends upon exports of textile products. The shift to a free trade regime definitely had a positive influence on this.

2. Economically who benefits when retailers in Europe and the United States source textiles from low-wage countries such as Bangladesh? Who might lose? Do the gains outweigh the losses?

Who benefits;
-Low income countries, extra job creation and good for their economy
-Customers, they pay lower prices for their goods
-Retailers, they have bigger profit margins

Potential losers;
-High developed countries, the outsourcing hurts the employment and economy
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3. What are the causes of the weak safety record of the Bangladesh garment industry? Do Western companies that import garments from Bangladesh bear any responsibility for what happened at the Rana Plaza and other workplace accidents? 4. Do you think the legally binding agreement signed by H&M, Zara, Tesco, and others will make a difference? Does it go far enough? What else might be done? 5. What do you think about Walt Disney’s decision not to purchase merchandise from Bangladesh? Is this an appropriate way of dealing with the problem? 6. What do you think of Walmart’s approach to