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OUR TOPIC IS Case Analysis on "Trade in Textiles-Holding the Chinese Juggernaut in Check" .

PREPARED BY: SKY Serial No. Md. 04. Nazrul Islam 09102101185 09102101221 09102101214 09102101215 . 02. Student Name Student ID No. 01. Abdus Salam Md. 03. Sohanul Haque(C) Md. Nazmul Hasan Md.

 To find out the position of Chinese textiles.  Have sufficient knowledge about Trade in Textiles in whole countries like China. Sri Lanka.  .  To find out the position of Bangladesh RMG sector. etc.OBJECTIVE OF THE PRESENTATION To require the pattern of Trade in Textiles-Holding the Chinese Juggernaut in Check. India. Bangladesh. US.

many poor countries like Bangladesh. . Sri Lanka. The MFA provided the basis on which the United States (US) and European Union (EU) countries restricted imports from developing countries. Without the MFA. the country that many expect to gain the most from a quota-free world.CASE BRIEF  From 1974 through 1994. the Multi-Fiber Arrangement (MFA) governed world trade in the textile industry. etc that have benefited from quotas especially China.

American and Chinese trade negotiators are tried to resolve an ongoing textile dispute. .)  There is a particular area in which China has become a leader: the textile industry. China's textile exports rose astonishingly. After the end of the Multi-Fiber Arrangement.CASE BRIEF (CONT.

how should you respond to the expiration of the agreement? 3. Whose interests were served by the November 2005agreement between the United States and China to limit the growth of Chinese textile imports into the United States? Do you think the agreement was a good one for the United States? 5. As a producer in a developing nation such as Bangladesh that benefited from the MFA agreement. Was the removal of the Multi-Fiber Agreement a positive thing for the world economy? Why? 2. Do you think China was right to place a tariff on exports of textiles from China? Why? Does such action help or harm the world economy? 4. What kind of trade barrier was erected by the November2005 agreement between China and the United States? .QUESTION OF THE CASE 1.

Was the removal of the Multi-Fiber Agreement a positive thing for the world economy? Why?  The removal of the Multi-Fiber Agreement was not positive for the world economy because it allowed more growth for strong economies and weakened the small economies. which was previously limited by MFA. .ANSWER TO THE QUESTION OF THE CASE Q 1. The quota system restricts competition and allows less competitive exporters to export more than their competitive share. Multi -fiber Agreement (MFA) is designed to protect developing nation from foreign competition. Export countries will face lower prices as a result of increase competition.

and productive work force. low wage.ANSWER TO THE QUESTION OF THE CASE o Some reasons of the removal of the Multi-Fiber Agreement are: Country such as China will monopolize the industry due to the comparative advantage. economies of scale. good infrastructure.   . With the expiration of MFA (elimination of trade quotas). it brings countries to a more open trade economy. reliable delivery and commitments as compared to other countries like Bangladesh. reduce trade barriers.

which was one of the big textiles and clothing exporters at the time. European Union and other industrialized nations forced developing countries to use export quotas on textiles and clothing. Having a set quota for the country would allow continual growth of the economy. the United States. . the expiration of the Multi-Fiber Agreement would hurt the economy tremendously. A developing country like China. As a producer in a developing nation such as Bangladesh. This was to protect the import-competing firms of industrialized nations who wanted time to adjust to the rising foreign competition. how should you respond to the expiration of the agreement?  The Multi-Fiber Agreement (MFA hereafter) was set up in 1974.ANSWER TO THE QUESTION OF THE CASE Q 2. would be adversely affected by this MFA arrangement.As a producer in a developing nation such as Bangladesh that benefited from the MFA agreement .

Do you think China was right to place a tariff on exports of textiles from China? Why? Does such action help or harm the world economy?  We feel as if by placing tariffs on exports of textiles from China it is actually hurting the world economy. when they export. the price will be higher for the importers of textiles from China. therefore. whether the tariffs are there or not. . This is going to hurt the economies of different countries. The tariff might not be too much but China will still produce and export the same amount.ANSWER TO THE QUESTION OF THE CASE Q 3.

Negotiators have agreed to allow US imports of Chinese textile and apparel products to increase up to 10 percent in 2006 and 16 percent in 2007.Whose interests were served by the November 2005 agreement between the United States and China to limit the growth of Chinese textile imports into the United States? Do you think the agreement was a good one for the United States?  The United States and China have reportedly reached a tentative agreement on imported Chinese textiles in November 2005. . The issue flared because of a surge in Chinese exports to the US after textile quotas were lifted at the start of the year. Comprehensive agreement on Chinese exports that compete with US made clothing and textiles.ANSWER TO THE QUESTION OF THE CASE Q 4.

S. the U.ANSWER TO THE QUESTION OF THE CASE Q 5. 2005. imports from China. The elimination of the last set of quotas of the Agreement on Textiles and Clothing (ATC) on January 1. ostensibly brought about the end of decades of quantitative restrictions on the international exchange of clothing and textiles.What kind of trade barrier was erected by the November 2005 agreement between China and the United States?  2005. which imports 15 percent of the maximum amount prescribed by the conclusion was determined. textile imports from China entered into bilateral negotiations as prescribed limit by 2008. .

. The execution of the ATC will affect countries in different ways. The MFA provided the industrialized countries the ability to limit imports from developing countries. These restrictions provided protection to domestic textile producers but allowed them to give preference to particular partner countries. This agreement benefits some of the developing countries but can also hurt others.PROBLEM STATEMENT  The Agreement on Textiles and Clothing (ATC) was implemented to eliminate the Multi Fiber Arrangement in stages by the year 2005. The Multi Fiber Arrangement has been governing the world trade in textiles and garments for the past thirty years.

China was not right to place a tariff on exports of textiles from china.FINDINGS & RECOMMENDATION  Findings:       From the study in this case following Findings may be made those are given below: The removal of the Multi-Fiber Agreement was not positive for the world economy. As a producer in developing nation such as Bangladesh is not benefited from the expiration of Multi-Fiber Agreement. Capped the growth in Chinese imports in to the United States at around 15% per annum until 2008. There might be evidence of textile market failure in the less comparative developing nations. .

Should be reduced the tariff rate in china on textiles. Bangladesh should think more about survival and try to be more efficient in the production of textiles. . Should be avoided the monopolize business in china and United States. The removal of MFA for the developing nations was not the best decision.FINDINGS & RECOMMENDATION  Recommendation:       The following points are recommended after studies are given below: Should be reduced the trade barriers between United States and China.

we will conclude by asking ourselves whether China is truly a threat for Europe. we will analyze the Chinese textile industry and see why China is getting so huge benefits from this sector. First we will deal with the Chinese openness to the world especially through its WTO membership and the consequences of the end of the Multi-Fiber Agreement on the Chinese textile. .CONCLUSION  This paper aims at dealing with the textile issue. Finally. Then.

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