Canada removed all duties and quotas on imports from Bangladesh in 2003. Since that time, Bangladesh has become the second largest source of Canadian merchandise imports from South Asia, totalling over C$1billion, the vast majority of these imports are garments and textile products.

Low labour costs are a key attraction for Canadian retailers. Suppose the production function for a textile firm is q=K^0.5L^0.5. What would the minimum cost of producing 1000units of output if the cost of capital is the same in country 1 and country 2 (r-Tk20000 per month each), but the other cost of labour in country 1 is half of that in the other country that is, W2=2W1 = Tk10000 per month.