The apparel manufacturers and exporters of Bangladesh further sought duty-free access to the US market for apparel items made from US cotton.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), sent three separate letters to US Ambassador to Bangladesh Peter Haas, Texas State Governor Greg Abbott and Texas State Senator Ted Cruz.
He said that the duty-free treatment for apparel made of US cotton will add further momentum which will boost bilateral trade and investment to a certain extent.
Almost 99% of the cotton for the RMG industry is being imported which makes Bangladesh the second largest cotton-importing country and a mentionable portion is imported from the US, the letter read.
Furthermore, the cotton that was imported for the export-oriented RMG industry came completely free of import duty, which gives a cost advantage to the cotton growers and exporters.
“The country's apparel import from Bangladesh reached $9.74 billion in 2022, of which $6.91 billion or 71% was made of cotton,” he said.
Moreover, US's cotton apparel import from the world in 2022 was worth $47.51 billion of which the share of Bangladesh was 14.54% meaning Bangladesh is one of the major suppliers of cotton-made apparel to the USA.
“However, the government of Bangladesh has recently issued a gazette notification easing the rules of mandatory fumigation tests for importing cotton from the US,” he added, noting that they appreciated the government for this policy reform which will certainly make trade easier.
Bangladesh is the second largest apparel exporting country in the world with a share of 6.37% in the global market.
In 2022 Bangladesh exported apparel worth $45.71 billion where a significant portion was made of cotton.
Moreover, Bangladesh exported $32.86 billion worth of cotton garments in the same year which was 71.89% of the total apparel export.
“Despite the challenges including Covid-19, our apparel export to the world has increased by 8.73% annually in the last 10 years which reflects the fact that we have further potential in the world market,” he added.
The US importers had to pay $1.55 billion worth of duty to import $9.74 billion worth of apparel from Bangladesh.
The average duty on all imported products from Bangladesh was amongst the highest in 2022, and the import tariff on clothing items from Bangladesh was even higher.
“As Bangladesh depends greatly on its access to foreign markets and the clothing industry remains the driving force behind our exports and economic growth, we urge the United States to consider duty-free access to apparel products made of US cotton,” the letter read.
As Bangladesh has positioned itself as a major supplier of apparel in the world, there is a clear potential for the US cotton grower and exporters to further tap this market.
He also mentioned the recent development of the mega infrastructure which may make Bangladesh a more favourable market for the US cotton growers.
Recently, BGMEA Vice-President Md Nasir Uddin negotiated with the US delegates regarding the issues and he said that they will primarily engage with business chambers and trade bodies.
They planned to discuss gradually with the national and local governments of cotton-producing states, especially Texas.
Bangladesh has been urging the US for duty-free access for a long time and they expect that the ongoing trade conflict between the US and China may favour them.
Currently, shipments to the US are subject to a 15.62% duty for local apparel exporters.
With the exception of several African nations under the African Growth and Opportunity Act, the US does not permit duty-free access to garment products sourced from any other country in the globe.