The generalized system of preference (GSP) on the products destined for the United States is not imminent but the US can work to provide other solutions like reducing tariffs, said John Fay, commercial counselor of the US Embassy in Dhaka.
He also said that he has heard from everybody the importance of finding a solution to the GSP problem and trying to find ways to reduce duties on the products, especially for cotton sourced from the US and ultimately used to export back to the US.
He was speaking at a seminar titled “Bangladesh-US Trade and Investment”, organized by the Economic Reporters Forum (ERF), an organization of the country’s business journalists, on Monday in the capital.
He said that the GSP is gone and it isn't even applicable as the US Congress has yet to reauthorize it.
“So, as it is, it's not an option for Bangladesh at this moment. We are trying to find ways to reduce tariffs on the products destined for the US as a way to grow exports,” he added.
Responding to the question regarding signing an FTA between the US and Bangladesh, he said that currently, they are not thinking of signing any potential FTA between the US and Bangladesh.
“It depends and might take a long time and according to my understanding, I don't know of any initiative right now that has been taken towards an FTA between the United States and Bangladesh,” he added.
He also stated that they are bringing in new US-based corporations while also protecting the interests of existing ones.
In order to solve the obstacles that US businesses face, they hope to collaborate with the Bangladesh government.
“The US will continue to be an excellent market for the Bangladeshi exporters, especially the RMG sector,” he added and also emphasized the protection of the workers' rights and workplace safety.
He said that there are several sectors where US investors can invest in, like healthcare, education, agriculture and ICT, he added.
Dr Mohammad Abdur Razzaq, research director of the PRI, presented the keynote.
He said that the US could be a more important source of cotton.
He also said that there are potentials of $2.5-$3 billion worth of additional cotton imports (from the US) over the next 5-7 years.
“If half of the Bangladeshi cotton items can take advantage of cotton for garment GSP with average 15% tariffs and usual demand elasticities assumed, the potential export gains for Bangladesh will be in the range of $400 million to $800 million,” he added.
Dr Masrur Reaz, chairman of the PEB, said that Bangladesh can be a long-term economic partner of the US.
“Bangladesh needs support and investment in innovation, agriculture, ICT, technology, and skill development. The sky's the limit for the US to invest here,” he added.
He further stated that in order to achieve its boundless potential, Bangladesh must create the necessary conditions, competitive environment, ease of doing business, and handle taxation and border clearance concerns.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), stated in his address that Bangladesh's exports are largely concentrated on RMG to the US, with a 9.75% share of the US clothing market.
In the last five years, the United States' garment imports from Bangladesh have climbed by roughly 14% per year, with the country importing $9.74 billion in 2022.
However, US importers must pay a tariff of more than 15% when importing clothing from Bangladesh.
He urged the opportunities for duty-free access to the apparel items made of US cotton to the country.
BTMA President Mohammad Ali Khokon also echoed the BGMEA President regarding the duty-free access.
He also said that every year they import around nine million bales of cotton and 11% of them are from the US.
“If the US provides duty-free access to the US cotton-made products, the import will increase further. Cotton is a natural product and its appeal will never be ended,” he added.
He also said that the quality of Bangladeshi products is certainly higher than that of China.
Fazlee Shamim Ehsan, vice-president of the BKMEA, said that though they export more to the US, still they are getting complaint-like suggestions.
“We implement ESG in manufacturing the RMG products but we don’t get any incentives or recognition in price,” he added saying that now it is high time for the US buyers to implement a fair price.
He also stated that the government should prioritize ease of doing business because they are experiencing difficulties in this area.
Shams Mahmud, Shasha Denims' managing director, also spoke at the event.
The event was hosted by Mohammad Refayet Ullah Mirdha, president of the ERF, and moderated by Abul Kashem, general secretary of the ERF.
