Textile and Clothing Sector Liberalization - Consequences for the Bangladesh Economy

This paper analyzes the impact of the Agreement on Textile and Clothing (ATC) and a worldwide tariff reduction on textiles and wearing apparels on Bangladesh.In both scenarios Bangladesh reduces its wearing apparel production and faces a welfare loss.The main reason is that Bangladesh has free access to its most important export market, the EU.Further trade liberalizations are therefore worsening the Bangladeshi position opposite to its competitors. The analysis stands on the general equilibrium model of the Global Trade AnalysisProject (GTAP). 1 We would like to thank Hajo Provo-Kluit from the Dutch Embassy in Bangladesh as well as Evelyn Heinel and Robert Light from the European Commission for their assistance.