Due to the presence of biased obligation benefits, there is a chance that Bangladesh might find difficulties to compete with Africa nations to export garments to the U.S. Export of various garments to the US produced in African nations is increasing gradually with the zero-duty benefit under AGOA. This has been increased by 9.66% and reached $926.8 million in 2013, as stated by the US Department of commerce.
Bangladesh is considered to be the most important country to export attires worth $5 billion per year to US by the payment of 15.61% duty. Garments exporters here had to pay worth $828 million as a duty to the customs of US in 2013 and a total of $3.41 billion in the past five years. Compared to the first 5 months export business of 2013, garment export to US by Bangladesh has decreased by 1.12% to$2.18 billion in this year. It is assumed that our competition will get tougher if African nations proceed this way to export to the US.
The unfair duty system and expensive production cost in local market are turning to be barriers in the path of success of Bangladesh. In addition to that, Bangladesh does not have cotton benefit that the African countries have. VF Corp and PVH Corp have started considering Africa to be the next big production place to set export business with the U.S. for being duty free. Already one of the biggest companies worldwide has made a 2 decade pledge to African region for its collectively responsible factories and steady maneuver.
The chief reason for Africa attaining popularity is their duty and quota free apparel exportation from more than 45 countries. Lesotho and Kenya are already producing for PVH but the company might use African cotton as their fabric and make up the attire. So Africa might become the next solution of clothing for US as the china is for the rest of the world for electronics. The most pleasing thing about doing business with Africa is the low cost where the minimum wage can be low as $23 a month! Whereas in other developed places it is found to be $100 a month. Moreover, Ethiopia uses electrical energy produced by geothermal and hydroelectric energy sources that make the energy cost 1/5th of that of china. This is helping Ethiopia become a more favorable sourcing spot.
Although the cost of production is low in Africa, the process is slow as well. Being expensive, China still takes hold onto 41% of the total imports of US of which 18% of yarn, 35% of textiles and 67%of daily usage items like towels, aprons, sheets etc. With rising wages and prices, companies have started to move on from china. The distinguishing benefit in the African trade inclination is that the material can come from any country, such as China or South Korea, yet receive duty-free status. It gives Africa an advantage compared to the major apparel-producing countries.
Bangladesh is considered to be the most important country to export attires worth $5 billion per year to US by the payment of 15.61% duty. Garments exporters here had to pay worth $828 million as a duty to the customs of US in 2013 and a total of $3.41 billion in the past five years. Compared to the first 5 months export business of 2013, garment export to US by Bangladesh has decreased by 1.12% to$2.18 billion in this year. It is assumed that our competition will get tougher if African nations proceed this way to export to the US.
The unfair duty system and expensive production cost in local market are turning to be barriers in the path of success of Bangladesh. In addition to that, Bangladesh does not have cotton benefit that the African countries have. VF Corp and PVH Corp have started considering Africa to be the next big production place to set export business with the U.S. for being duty free. Already one of the biggest companies worldwide has made a 2 decade pledge to African region for its collectively responsible factories and steady maneuver.
The chief reason for Africa attaining popularity is their duty and quota free apparel exportation from more than 45 countries. Lesotho and Kenya are already producing for PVH but the company might use African cotton as their fabric and make up the attire. So Africa might become the next solution of clothing for US as the china is for the rest of the world for electronics. The most pleasing thing about doing business with Africa is the low cost where the minimum wage can be low as $23 a month! Whereas in other developed places it is found to be $100 a month. Moreover, Ethiopia uses electrical energy produced by geothermal and hydroelectric energy sources that make the energy cost 1/5th of that of china. This is helping Ethiopia become a more favorable sourcing spot.
Although the cost of production is low in Africa, the process is slow as well. Being expensive, China still takes hold onto 41% of the total imports of US of which 18% of yarn, 35% of textiles and 67%of daily usage items like towels, aprons, sheets etc. With rising wages and prices, companies have started to move on from china. The distinguishing benefit in the African trade inclination is that the material can come from any country, such as China or South Korea, yet receive duty-free status. It gives Africa an advantage compared to the major apparel-producing countries.
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