Good ties can help Bangladesh RMG enter duty-free in US (Bangladesh)

Bangladesh should try to develop good relations with the US so as to earn duty-free access for its readymade garments (RMG) to the US markets, US Ambassador Dan W Mozena said while sharing his views during a discussion on 'Bangladesh-US bilateral trade: the way forward' organised by Dhaka Chamber of Commerce and Industry (DCCI).

 

He said earning such an access and the Generalised System of Preferences (GSP) status from the US is a political process.

 

Stating that Bangladesh has been lobbying for earning the trade preference, Mr. Mozena suggested that Bangladesh should petition before the US congress, which decides on granting zero-duty market access to any country.

 

Under the US’s existing customs rules, 97 percent of Bangladeshi items enjoy duty-free access to the US. However, garments - Bangladesh’s key export item, are not included in the list.

 

In spite of being a least developed nation, Bangladesh pays an average duty of about 15.3 percent on its garment exports to the US, which is even more than the duty paid by the developed and developing nations. For example, China, the world’s biggest apparel exporter, ships its garments to the US market by paying a duty of only three percent.

 

Stating that Bangladesh paid over US$ 600 million in duty for exporting apparels worth US$ 5.10 billion to the US in 2011, Mr. Mozena said that developing good trade ties with the US would be a good idea.

 

He suggested that Bangladesh should enter into a Trade and Investment Cooperation Framework Agreement (TICFA) with the US to develop good bilateral trade relations with that country.

 

TICFA forms a base for discussion and resolution of all trade-related problems, and hence Bangladesh should open up to have this forum, he said.

 

With its vibrant private business sector, Bangladesh has a capacity to become the world’s largest garment exporter. Also, the country can develop into a good investment destination, given its good natural gas reserves and human resources, Mr. Mozena said.

 

According to the DCCI statistics, during initial nine months of the last fiscal that concluded on June 30, 2012, Bangladesh exported goods worth US$ 3.75 billion to the US, and imported items worth US$ 0.57 billion from there.

 

During 2010-11, the country’s exports to the US stood at US$ 5.10 billion, while its imports were valued at US$ 0.68 billion.