A major threat to Bangladesh economy is the possible displacement of its apparel industry by competing exporters after phasing out of MI A in 2005, said a report prepared for the 3" UN Confer ence on least Developed Countries (I DCs).

I he threat of displacement by competing exporters has become higher due to the recently-enacted US I rade and Development Act 2000 (USTDA). The US I DA granted 72 countries of the sub-Saharan and Caribbean regions duty and quota free access to the US apparel market, said the report to be presented at the conference beginning on May 13 in Brussels.

I he report has been prepared under the responsibility of the Economic Relations Division (I RD) after consultation witli the members of National Preparatory Committee representated by various ministries, -Chambers of commerce and industries and non-government organisations in Bangladesh.

“The growth momentum of Bangladesh in economic as well as

social fronts will sutler serious reversal and their will be major dislocations on the economic front, particularly with respri r to balance ol payments situ.Ilion, if the industry gets dispknrd by competing exporters."

Bangladesh urgently m eds in teiiuitional support to be able to withstand such exogenous shock, it said.

In the short run. there is a strong case for providing quota and tariff free access to Bangladesh’s export by its major trading partners prior to the phasing out of MFA.

In the medium and long run, Bangladesh will need technical and financial supports to diversify its production base and achieve greater competitiveness by relaxing various supply-side bottlenecks, the ERD report mentioned.

"The degree to which the targets set in the Action Programme 2001-2010 will be realised, will hinge critically on the extent to which the international community leaves up to its commitment with regard to greater market access, increased official development assistance (ODA) support, larger inflow of FDI and enhanced technical assistance".

Under the WTO Agreement on textiles and Clothing (ATC), the MI A is going to be phased out by 2005. The gradual reduction in the import tariffs on clothing is also going to erode the benefits that Bangladesh enjoys under GSP l.icilities, it stated.

\s a result, Bangkidenh will lace still competition Irom coini tries, which until now were restricted because of the quota or the high level of import tariffs, the report said adding Bangladesh will be specially disadvantaged in this competition, as it is dependent on imports lor more than 80 per cent of its fabric needs for the apparel industry’.

Currently, apparel export accounts tor about 75 per cent of the c ountry s gross export v.tmmgs, it said staling the industry employs nearly 2 million workers, which constitutes more than 40 per cent of manufacturing employment and of whom nearly 90 per cent is female.

The high rate of employment of women has contributed to their empowerment, increased their mobility and expanded their individual choices, the ERD report said.