Revealed Comparative Advantage and Competitiveness for RMG Industryof Bangladesh: A Pre & Post US-GSP Suspension Analysis

Abstract

<p class="Default" style="text-align: justify;"><em>This study investigates the Revealed Comparative Advantage (RCA) analysis for the Ready-Made Garment (RMG) sector of Bangladesh along with few other selected countries like India, Sri Lanka, Vietnam, Pakistan, China, Cambodia, and Turkey to explore the impact assessment on the US-GSP suspension for Bangladesh. It aims to explore how US-GSP suspension influences Bangladesh&rsquo;s manufacturing sectors and the export of RMG goods. </em></p> <p class="Default" style="text-align: justify;"><em>This study uses the RCA framework to analyze the extent of export competition amongst Bangladesh and other selected competitors. For this purpose, the study has applied Balassa&rsquo;s (1965) Index for the analysis.&nbsp; </em></p> <p class="Default" style="text-align: justify;"><em>It argues that the degree of competition among other selected competitors will intensify with implementing the US-GSP requirements to get the GSP facilities to the US market. After the suspension of US&ndash; GSP, Bangladesh&rsquo;s export share to the US market has decreased from 5.97 to 5.67 percent, amounting to US$ 134.64 million. On the other destination, EU&ndash;market share is at a steady-state situation for Bangladesh&rsquo;s RMG sector. This indicates that the US&ndash;GSP status is very important to enhance a positive image and increase the world market's trade volume. </em></p> <p style="text-align: justify;"><em>This paper contributes to the literature by investigating whether the US- GSP has any significant influence on the trade flow of Bangladesh. As this study has been based on a quantitative analysis using the Pre and Post US- GSP suspension RMG export flows from Bangladesh to the USA market, it is expected to help in policy implication regarding product and marked desertification of Bangladesh&rsquo;s RMG industry.</em></p>

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