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The Rise

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1) Why was the shift to a free trade regime in the textile industry good for Bangladesh?
It gave them more opportunities to sell the product. More profit was made and Bangladesh was able to grow more rapidly with the increase of income.

Labor costs are low, investment by textile manufacturers in productivity – boosting technology lowered the labor costs in Bangladesh making one of the world’s low-cost producers. The advantage is that big importers increased their purchases at low prices; strong network of supporting industries; Many Western importers looking to diversify their supply sources.

Textile manufacture is a labor-intensive business, and the cost of labor is very low in Bangladesh.
The lack of regulations governing business practices, including building codes, worker safety, and working conditions also lower costs in Bangladesh.
There is a critical mass of textile factories in Bangladesh and a large reservoir of appropriately skilled labor, suppliers, and export companies. This geographic concentration of workers and enterprises produces positive externalities that benefit the entire local industry and arguably leads to productivity gains.

The shift to a free trade regime was good for Bangladesh because their exports continued to grow even through the economic crisis the rest of the world was having. They continued to grow because labor is so cheap and because of the economic crisis companies like Wal-Mart were looking for low cost garments.

Employment and economic growth in Bangladesh depends upon exports of textile products which were allowed through a preferential quota system for textile market export from poor markets to rich markets. As soon as the shift to a free trade regime appeared along with the competition with countries such as China and Indonesia the quick collapse of Bangladesh’s textile industry has been predicted. However,

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