At present out of all the businesses running in the country, the readymade garment (RMG) sector has taken the lead in posting the maximum foreign currency earnings and employing a large number of people in the sector. The RMG sector has greater potential than any other to contribute to the reduction of poverty in the country. The sector has fast become important for generation of employment, foreign exchange earnings and for its contribution to the Gross Domestic Product (GDP).
Despite the phenomenal success of the RMG sector, poor working conditions in factories and the lack of social and safety compliance are the causes of serious concerns, which led to labour unrest and damage to institutions and properties as well as loss of lives in some cases.
Although China and Vietnam are still leading in the U.S. apparel import market, Bangladesh has been gaining ground as well. Apparel imports from Vietnam have totalled $6 billion, according to the most recent data published by the US Department of Commerce and have grown almost three times faster than those from China so far this year, though the total volume is just over a quarter the size of China's.
Growth in imported apparels from Vietnam accelerated in December 2013, bringing its share of U.S. apparel imports to 10 per cent, a gain of almost 0.9 percentage points so far this year compared to the corresponding period in 2012.
Vietnam has maintained its strong number two position thanks to an increase in men's and women's cotton and manmade fibre shirts and blouses, men's and women's pants and manmade fibre dresses. There was a decrease in some categories of innerwear (bras and nightgowns) but an increase in other wear (underwear and pajamas). The total apparel imports from Vietnam so far this year are $ 4.5 billion, up by 12.5 per cent from last year.
U.S. apparel imports from China totalled $22.4 billion through September. The year-to-date units (on a square metre equivalent basis) rose 5.2 per cent, driving the cost per unit down by a higher-than-average 2.5 per cent. China's share of U.S. apparel imports is 37 per cent, ahead of last month's 36 per cent year-to-date share, but 0.4 percentage points behind the same period of last year.
Total apparel imports have grown 3.7 per cent on a dollar basis through September compared to the first nine months of last year, Total unit volume, measured on a square metre equivalent basis, has increased 5.3 per cent in the year-to-date period, driving the average cost by 1.5 per cent.
Product categories from China that have seen the biggest increases so far this year include women's and girls' woven cotton pants, manmade fibre men's knit shirts, women's blouses and hosiery, manmade bras and other intimate apparel. These increases were offset by declines in many other categories, including cotton and manmade fibre skirts and dresses.
Despite all its safety and infrastructure related concerns, Bangladesh has come roaring back and so far this year has shipped $ 3.8 billion worth of apparel items to the U.S. It is now the third largest source of the U.S. apparels, having replaced Indonesia in the number three spot. Key categories of products from Bangladesh include men's woven cotton shirts and men's and women's cotton pants. However, the new wage structure in Bangladesh that significantly increased the minimum wage might alter considerably the country's cost advantage vis-Ã -vis China and Vietnam, and could slow down its growth.
Sri Lanka is also on the move. So far, this year, it has shipped over $ 1.2 billion worth of apparels to the U.S., 10.3 per cent ahead of last year, the second fastest growth rate after that of Vietnam, putting it ahead of Pakistan as one of the top U.S. trading partners in dollar volume. One reason for this is a 3.4 per cent fall in the value of the Sri Lankan rupee compared to the U.S. dollar in the first nine months of the year. Key categories of products from Sri Lanka include women's under garments and men's and women's cotton pants, the two areas in which Sri Lankan clothing makers have developed specific capabilities. Mexico, Honduras and Indonesia have also suffered significant losses in their shares of the U.S. apparel market.
 Apparel imports from Vietnam, Bangladesh and Indonesia grew faster than those from other top U.S. trading partners in the last five months of 2013, according to the data just released by the U.S. Department of Commerce. Imports from China grew at almost the same rate leaving its share of US apparel imports unchanged.
Bangladesh gained 0.3 point of the US apparel market share in the first five months of 2013 to 7 per cent of total apparel imports. Despite the concerns over factory safety, it is now the fourth largest source of US apparels and may soon rival Indonesia for the number three spot.
The Savar factory collapse is the biggest tragedy in the country's garment sector. It happened at a time when the RMG sector was yet to overcome the impact of the Tazreen Fashions fire. The garment workers' safety and security have now been in the more sharp focus internationally.
Sudden suspension of the GSP facility without giving any timeframe is quite unexpected. After disasters like the Tazreen Fashions fire and the Rana Plaza collapse factory owners and the government pledged to take steps to improve labour standards. The government, garment manufacturers, exporters and workers' groups criticised the US move as 'unfortunate' and observed that the action instead of ensuring labour rights would hamper their interests, because it might retard the pace of the growing economy. Bangladesh believes that its partnership with the US is founded on "certain core values such as democracy, human rights, rule of law, women's empowerment, freedom of expression and social justice". Â
Bangladesh now needs to implement the National Tripartite Plan of Action on Fire Safety and Structural Integrity in the RMG sector, in accordance with the established milestones and timelines, as stipulated in the Programme of Action taken by the government. Without such arrangements in place, negative impacts will continue to recur without any real improvement. Given the vital role that the garment sector, it makes sense to create a separate ministry to deal with the issues. This has been a longstanding demand. It is time the government considered it vital to the improvement of the sector.
Our garments sector can improve its position on the world map by adequately addressing the concerns of labour unrest, work place safety, and improving upon management efficiency and strategic planning.
The writer is an instructor at the Fire Safety                           Cell of Bangladesh Knitwear Manufacturers &                    Exporters Association (BKMEA)                litonsarkar1@yahoo.com
US apparel market and Bangladesh scenario
Liton Chandro Sarkar | Published: January 23, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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