The US market may further shrink for Bangladesh garment exporters who will face stiff competition from China, India and some other countries when the open market regime begins next year with the abolition of all quotas.

Export income from the US reached the highest $2500 million in 2000-2001 fiscal year, which came down to $1966 million in FY 2003-04, due to a steep decline in earnings from the key export item, readymade garment (RMG).

RMG exports went down by $570 million or 26 percent during the same period, to stand at $1628 million in the last fiscal year from $2198 million in 2000-01, according to Export Promotion Bureau (EPB).

"Quota phaseout, lead time problem and the US decision to provide preferential market access for Sub-Saharan and some other countries have adversely affected our export market in the US," Annisul Huq, president of Bangladesh Garment Manufacturers and Exporters Association, told The Daily Star.

Bangladesh still has potential for increasing export to the US market but the exporters must get duty-free access there, the BGMEA chief said citing the example of an ever-increasing Chinese share in the US market.

Recent studies suggest that Chinese share in the US market may go up to 50 percent from the present level of 16 percent. Indian exports to the US may also rise sharply to secure 16 percent market share from the present four percent, Huq noted.

The BGMEA chief fears 25 to 40 percent RMG units may face closure in the next two or three years, rendering thousands of garment workers jobless if Bangladesh fails to sustain in the stiff competition after expiry of the multi-fibre arrangement (MFA).

Export income from the US, which was 38.8 percent of Bangladesh's total earnings $6467 million in 2000-01, declined by 13 percentage points in the last three years to stand at only 25.9 percent of the total earning $7602.99 million in 2003-04.

Professor Mustafizur Rahman, research director of the Centre for Policy Dialogue (CPD), said garment exports to the US market have declined in certain categories, which are now not enjoying the quota facilities. In the already quota phased out categories Bangladesh's position in the US market slipped to seventh from the second place.

Income from other categories that are still enjoying quota facility also dipped mainly due to lead-time problem and a declining trend in prices, he observed.

"China has cut prices of its products in the US market by 46 percent that has created pressure on other exporters including Bangladesh. Our exporters are also facing stiff competition from India and Turkey in some other categories," said Rahman.

The CPD researcher said although there is an upturn in the US economy and the demand for certain products including IT-related products and automobiles has increased, response from garment buyers is still low. Bangladesh mainly exports woven garment to the US where its demand did not increase substantially, he added.

Despite the decline in the US market, export earnings hit a new high in the last fiscal year reaching $7602 million. RMG constitutes more than three-fourths of the total earning.