Like many other developing countries in the world, Bangladesh had pursued inward-looking policies and strategies for trade and development since its independence in 1971. These policies involved high government interventions in almost all economic activities including agriculture (Ahmed et al., 2007: 2, 7; Draper and Sally, 2005: 3; Hoque and Yusop, 2010: 1; Rahman, 2008: 5). Bangladesh encouraged cooperative farming with a view to developing a socialist system of agriculture during the 1970s. The government-controlled the procurement and distribution of seeds, fertilizers, pesticides and all other agricultural inputs and equipment (Ahmed, et al., 2007: 2, 7; Ahmed and Sattar, 2004: 11; Salim and Hossain, 2006: 2568). The government adopted import substitution policies with restrictions on imports to protect and support domestic production. It controlled the foreign trade and exchange rate system for making interventions effective (Ahmed and Sattar, 2004: 11; Krueger, 2010: 2; Nahar and Siriwardana, 2009: 327; Salim and Hossain, 2006: 2568). A series of measures including quantitative restrictions, highly differentiated tariff rates (ranging from 0 to 400 percent), huge production subsidies and overvalued exchange rates were put in place to protect domestic production from world competition (Ahmed, et al., 2007: 7; Ahmed and Sattar, 2004: 11; Nahar and Siriwardana, 2009: 327; Salim and Hossain, 2006: 2568). Trade liberalization has gained popularity since David Ricardo?s analysis of comparative advantage which explained how trade would benefit economies with differences in opportunity costs of production (Amoroso et al., 2011: 1; Rahman, 2008: 1; Whaples, 2006: 1; Zhang, 2008: 25). However, the effects of trade liberalization on development have been a subject of debate for centuries (Chang et al., 2009: 1; George, 2010; Gingrich and Garber, 2010: 1; Nicita, 2004: 1; Rahman, 2008: 1). Ever since David Ricardo?s critique on the Corn Laws through to the current debate on globalization, few topics in economics have been more seriously contested as the importance of trade liberalization for economic development (Chang, et al., 2009: 1; George, 2010; Gingrich and Garber, 2010: 1; Nicita, 2004: 1). The arguments in favor of free trade are well known and date back at least to Adam Smith?s analysis of market specialization and the principle of absolute advantage in 1776 (Chang, et al., 2009: 1; Rahman, 2008: 1; Zhang, 2008: 24, 25). Classical economists argue that free trade is an engine of growth, while protection leads to wasteful use of resources, thereby adversely affecting economic development (Chang, et al., 2009: 1; Krugman and Obstfeld, 2006: 218, 219; Rodriguez and Rodrik, 1999: 8; Stiglitz and Charlton, 2007: 32, 33; Stone and Shepherd, 2011: 5; UNIDO, 2010: 1). On the contrary, critics argue that openness has its costs and sometimes it could be detrimental to economic development (Chang, et al., 2009: 1; Rodriguez and Rodrik, 1999: 8; Stiglitz and Charlton, 2007: 32, 33; Stone and Shepherd, 2011: 5; UNIDO, 2010: 1). Bangladesh has been pursuing the green revolution programme since its independence in 1971, with a view to increasing productivity in agriculture for attaining self-sufficiency in food production. Agricultural trade liberalization and technological transformation in the 1980s and the early 1990s generated further momentum in Bangladesh?s agriculture, resulting in a significant increase in the volume of rice production which led to self-sufficiency in food grains by the early 1990s (Ahmed and Sattar, 2004: 19; Islam and Habib, 2007: 4; Rahman, 2008: 16).