BGMEA calls for duty-free access to US market

BGMEA calls for duty-free access to US market
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“We met with US cotton industry officials on Wednesday and reiterated our call,” said Md Nasir Uddin, BGMEA vice president tasked with negotiating the issue.

They would primarily deal with chambers of commerce and trade associations of American cotton and apparel companies to bolster their demand in those business communities.

Gradually, the BGMEA’s request will be brought to the local governments of cotton-growing states in the US, as the proposal will then be heard at the national level, he added.

Bangladesh has long demanded reduced rates, if not duty-free benefits, from the US on shipments of clothing items made in the country from cotton imported from the western nation.

Currently, local apparel exporters face a 15.62 percent tariff on shipments to the United States.

The US does not allow duty-free access for apparel items originating from any country in the world, except for those from certain African countries that fall under the African Growth and Opportunity Act.

This time, however, Bangladesh could benefit as the government has eliminated the requirement for double fumigation of cotton imported from the US.

Traditionally, cotton imported from the US had to be fumigated on-site, even if the raw material had undergone such treatment before shipment. This created barriers to export, as the additional time and expense involved resulted in delays in completing work orders over the past five decades.

“We therefore hope for a positive response as American companies would also benefit if the initiative goes ahead, especially given the ongoing US-China trade tensions,” Nasir Uddin said, citing how cotton-producing states in the US want the facility as well as.

The issue was discussed at length by Salman F. Rahman, the Prime Minister’s adviser on private sector and investment, and Donald Lu, the US State Department’s assistant secretary for South and Central Asian affairs, during his visit in January.

The initiative was originally taken by former BGMEA President Siddiqur Rahman about five years ago, but efforts have been shelved for various reasons.

“We could even set up spinning mills in US cotton-growing regions if your government allows it. That way we could process the yarn ourselves before sending it to Bangladesh, where the material would be made into garments to be exported back to the US,” he told The Daily Star.

Rahman hopes Bangladesh will receive tariff benefits from the US as both sides have positive negotiations on the matter.

Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), said local exporters could take advantage of the US market if they receive tariff breaks, as Vietnam performs strongly in this regard thanks to a free trade agreement with the country.

The BTMA has also been in talks with US cotton traders to agree on such trade benefits as their country is a key cotton supplier to Bangladesh, he added.

Monsoor Ahmed, associate director of the BTMA, said Bangladesh currently imports 13 percent of its total cotton needs, or 8.50 million bales, from the US each year.

He added that cotton imports have increased rapidly since the double fumigation requirement was removed.

The US is the largest export destination for Bangladesh. In the 2021-22 fiscal year, Bangladesh exported US$9.01 billion worth of apparel items to the western nation, registering a year-on-year growth of 51.57 percent.

But during the July-February period of the current fiscal year, Bangladesh exported $5.60 billion worth of garments, down 2.87 percent year-on-year.

Bangladesh faced nearly $1 billion in tariffs on apparel exports to the US market last fiscal year.

Source: News Network

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