The garment trade in Bangladesh picked up because of preferential access to important markets such as the European Union (EU) and America. But when the rules governing exports to rich countries were changed at the beginning of 2005, huge job losses were feared.

But Bangladesh's garment exports are still booming. It exported clothes worth $8.9 billion last year. Revenues from the garment trade account for about 80% of all exports and are double the remittances sent home by Bangladeshis working overseas.

The country has made good use of its labor, its only abundant resource. Wages are lower than in China, India, Cambodia or Vietnam, its main competitors. About two million people, 90% of them women, work in the rag trade, and another 15 million jobs depend indirectly on making clothes, through firms that produce thread, buttons and textiles.

According to current trends, Bangladesh's garment exports will soon overtake those of its neighbor, India. Cheap labour, along with the reluctance among buyers to rely on China for all their purchases, appears to have won the Bangladeshi industry a reprieve. But the recent growth in exports to its two biggest markets, the EU and America, has occurred because of the restrictions on Chinese exports, which end next year.

In Canada, the only big market that places no restrictions on China, Bangladesh has lost market share.

Knitwear constitutes most of the country’s garment exports. The inputs to this sector are made locally. That saves firms the transport and storage costs, import duties and long lead-times that come with the imported “woven” fabric used to make shirts and trousers. It also entitles them to duty-free access to the European Union.

The Export Promotion Bureau has set the export target for the fiscal year 2007-08 to the extent of $ 13.50 billion, 10% higher than that of the last year.

The target has been sketched on the basis of the last fiscal year's export earnings and depending on the contribution of the apparel sector that constitutes about 76% of the total export earnings.