Apparel products alone fetched $5.40 billion of total merchandise export
Bangladesh exports to the US registered a 6.42% rise to $5.60 billion in 2018, riding mainly on apparel items to the single largest export destination, according to Otexa data.
Apparel products alone fetched $5.40 billion of total merchandise export.
Non-apparel products managed to earn only $206.25 million during the period.
In 2017, Bangladesh RMG exports to the US market saw a 4.51% negative growth to $5.03 billion, which was $5.30 billion in 2016.
Industry insiders and trade analysts attribute the positive growth in export earnings to the ongoing trade war between the US and China, and improvement in safety standards at apparel factories.
“Safety inspection by Alliance, a platform of North American buyers to improve workplace safety made significant progress throughout 2018, bringing satisfaction among western buyers that resulted in more work orders,” BGMEA vice president Mahmud Hasan Khan Babu told the Dhaka Tribune.
In addition, tariff wars between the US and China expedited the growth as a section of buyers changed their sourcing destination to Bangladesh, said Babu.
The work order inflow will continue to grow as buyers realize the tension will linger, he added.
However, trade analysts have termed it a spillover effect of the trade war and suggested becoming more systematic in taking this opportunity due to the tension.
“As a spillover effect of a trade war, Bangladesh exports to the US saw a rise which is not enough as other competitors have performed better to grab more of the apparel market share in the USA. Bangladesh cannot take full advantage of the situation due to lack of diversified products,” Centre for Policy Dialogue (CPD) research director, Khondaker Golam Moazzem, told the Dhaka Tribune.
In reaping benefits, Bangladesh has to move towards product diversification and develop infrastructure to attract investment relocating from China, said Moazzem.
Cambodia, Turkey, and Pakistan are reaping the most benefits as they have expanded their range of apparel products, he added.
As per the data, Cambodia’s apparel exports to the US rose by 12.19% to $2.40 billion, followed by Pakistan at 7.07% to 1.36 billion, and Turkey by 9.28% to $575 million.
Meanwhile, apparel makers have sought government policy support in attracting Chinese investments and to grab more market share.
“To maximise the benefits of the trade tension, the Bangladesh government has to research the opportunity and take necessary steps in materializing dreams,” Exporters’ Association of Bangladesh (EAB) president Abdus Salam Murshedy said.
To attract investment and buyer attention, Bangladesh has to incentivize investors to invest here and develop proper infrastructure, added Salam.
On top of that, the government should start bilateral negotiations with the US government to increase our trade, he said.
Recently, the Asian Development Bank (ADB) said Bangladesh merchandise exports will increase an additional $400 million and its Gross Domestic Product (GDP) will grow by 0.19% in the next one to two years if the prevailing international trade conflict involving the US and China escalates.