US Ambassador in Dhaka Dan W Mozena has strongly denied the allegations that Bangladesh pays tariff for apparel exports to the US market.
“Bangladesh pays zero … zero … zero … zero tariff,” he firmly said, replying to a question at a meeting with the Economic Reporters Forum (ERF) held at the National Press Club in the city yesterday.
His claim came as a surprise to Bangladeshi garment manufacturers and exporters as they have to pay an average of 16.5% tariff for apparel exports to US.
All the countries excepting ones having special trade relationship with the United States pay same tariff rate, he said.
“There is no discrimination against Bangladesh in terms of tariff rate as China, Bangladesh, India and Cambodia pay the same tariff rate,” he said.
Referring to the news papers reports that Bangladesh pays to America US$800m tariff, the US envoy said, “I would like to ask the government of Bangladesh to show me the cheque worth $800 please, which you sent to America. Off course, there is no such cheque.”
“But people of America and buyers pay the tariff,” said the envoy.
In a sharp contrast, talking to the Dhaka Tribune BGMEA vice president Shahidullah Azim, has, however, said Bangladesh pays 16.5% tariff for apparel exports to America.
“We export garment products worth $5bn to America paying $850m every year,” categorically said Azim, outright rejecting the claim of the US envoy.
BGMEA leader said, “He (Mozena) is right that the buyers pay the tariff... not the sellers. But buyers buy the products from us charging tariff rate, meaning that we are paying the tariff, not the buyers.”
Dhaka has long been saying that the tariff rate for Bangladesh is “exceptionally high” compared to other countries in the US market. Of the yearly export of Bangladeshi products to the US market, 95% are garment items.
“In the last five years, Bangladesh paid $3.04bn tariff on exports of garment products to US,” Commerce Minister Tofail Ahmed had earlier told the Dhaka Tribune.
The average duty Bangladesh pays to the US is more than 16% and the tariff on garment products is 15.62% while Vietnam pays 8.38%, Indonesia 6.36%, China 3%, Germany 1.16%, India 2.29%, Turkey 3.57% and Hong Kong 1.25% tariff, according to the minister.
In response to the question on GSP (Generalised System of Preferences) privileges suspended by US in mid-2013, the US envoy said: “To restore GSP facility, you need to transform the industry to the highest standard … need to ensure workers safety and rights … make this transformation so that building will never collapse like Rana Plaza and Tazreeen Fashion Fire.
He, however, said transformation is happening ... I visited many factories to see the transformation which is under way, but much more needs to be done.
As people always say that Bangladesh needs to get duty free and quota free access to the US market, Mozena said, “It has no meaning. We have GSP. The first step is to ensure workers’ rights and safety, and the second step to make strong argument to the congress of the United States.”
Replying on investment opportunities in Bangladesh and recent operation suspensions by the US oil and gas giant ConocoPhillips from two deep-water blocks, he said it was a question of environment that attracts the investment.
“If you go to Myanmar, you find between 30 and 40 international oil companies competing to do on shore and offshore exploration, why they are there … because pricing structure is attractive there and Bangladesh also needs to create price structure attractive.”
For turning Bangladesh into Asian tiger, US Envoy put importance on imparting quality education, infrastructure development, ensuring energy, rule of law, reining in corruption, reducing red tape and minimising threat of political instability.
“Education is the only way to build the country. You need to recruit best teacher offering high salary and incentives to educate the kids for building the nation.”
“Bring the world into the class room using internet. But unfortunately, thousands of schools I visited have no library, toilet and so on.”
In his written speech, he said, “I recently finished my quest to visit all 64 of Bangladesh’s districts. I learned so much. Most importantly, I learned how rich this country is...so many assets. I learned ample water, great climate for agriculture, significant gas reserves, huge deposits of premium coal and, most importantly, the hard-working, creative, entrepreneurial, resilient people of this nation...”
“These great people are the key to creating Asia’s next economic tiger,” he said.
This Asian tiger would be the nexus of and a giant contributor of goods to one of the emerging great trade routes the 21 st century, the Indo-Pacific Economic Corridor, linking South Asia with China, South East Asia and the world. Active, dynamic linkages of trade and energy between Bangladesh and its neigbours would benefit everyone in the region...a true win-win for all, he said.
He said the Royal Bengal Tiger....the world’s largest exporters of apparel and a major player in the global marketplace for generic pharmaceuticals, shoes, finished leather goods, small freighters, software development, semi-conductor production, frozen shrimp and fish, bone china, flowers, silk and so much more.