Bangladeshi representatives responded to all the inquiries at a hearing of the United States International Trade Commission (USITC) held virtually on Monday.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), along with representatives from the Commerce Ministry, responded to various questions.
A total of five countries that export readymade garment (RMG) to the US market were questioned by USITC Chairman David Johansson and three other officials during the four-hour hearing.
The USITC is starting an investigation into the five countries – including Bangladesh, India, Cambodia, Indonesia, and Pakistan – at the request of the US Trade Representative (USTR).
The commission will investigate how these countries have occupied such a large portion of the US apparel industry.
The main objective of this commission is to find out whether any of these five countries are occupying the market through unhealthy competition.
Apart from this, there will be an opportunity to present written statements till March 24, and the commission will submit its investigation report to the USTR on August 30 later this year.
Faruque Hassan said that the rise of the RMG industry in Bangladesh is closely linked to its export to the US market, as the market has been the largest export destination since the mid-1980s, till date.
However, despite numerous challenges, the apparel industry in Bangladesh has shown commendable progress in improving workplace safety.
“In the last 10 years, the industry invested millions of dollars for workplace safety remediation, in collaboration with ILO, global brands and global worker federations,” he added.
The apparel industry previously used to rely on labor abundance, but the wages have become comparable to the competitors.
Beyond mere compliance, Bangladesh’s apparel industry has shown unconventional commitment in ensuring sustainability with 211 Leed-certified green factories.
“It doesn’t come without its cost component. In general, a green factory costs 25%-30% more in setting up than a traditional one. The multi-fibre arrangement (MFA) quota system was a major factor which contributed to our initial development, however Bangladesh never received any tariff preference to the United States after the MFA quota phased out in 2004,” he also said.
"The industry is focusing and investing in technology and machine upgradation, and process optimization. We are investing more on cutting edge technologies that save resources and reduce wastage; to reduce cost and create a positive impact on the environment."
“As you investigate the competitiveness of select suppliers to the US, we strongly suggest the USITC takes a holistic view on the overall competitive scenario not only considering the cost and efficiency-based competitiveness, but also the investments the industry has made over the last decade in workplace safety, workers wellbeing and environment sustainability – which adds significant intangible value to the global fashion value chain,” said the BGMEA president.
Hassan also said that the economy is in a significant transition phase and the US is a time-tested friend of Bangladesh.
“We have received US support during various critical periods of our national life, particularly at the time of Child Labor elimination when Harkins Bill was placed in 1995. Though after MFA phase out, we never received any preferential access to the US market,” he added.
Yet, the government is bringing in reforms like waiving the double fumigation policy for US cotton, he went on saying that trade has done its wonder so far to support an economic rise from aid dependency, and this should be nurtured to allow it to take firm root.
Bangladesh's response
At the beginning of the hearing on Bangladesh, Commerce Secretary Tapan Kanti Ghosh said workers' wages have increased by at least 316% in three phases in the last 10 years.
The production cost per unit in the apparel industry has also increased significantly. However, maintaining a competitive edge in the US market for Bangladesh requires more than just low product prices.
He added that the government is trying to overcome the challenges faced by Bangladesh's garment industry in various ways.
In a pre-hearing brief, Faruque Hassan presented the up-to-date scenario of the US-Bangladesh apparel export.
