Bangladesh's Goverment Readying Plan to Win Duty-free Access to U.S. Market

The Bangladeshi government is taking preparations to persuade the United States to meet its long-cherished demand for duty free access of products from Bangladesh to that country for its being among the LDCs under World Trade Organisation (WTO).

Officials have said the initiative was reinforced as the United States has taken steps to conduct a study to find that the volume of exports from the Least Developed Countries (LDCs) to the US market has increased significantly even with the duty bar in place.

Alongside, the export of products from Africa to the US, with whom the former has bilateral agreements on enjoying duty-free access facility, has decreased significantly.

The officials said the US government has assigned International Trade Commission (ITC) to conduct the study to find the economic impact for the country if 95 per cent duty-free facility is given to the LDCs including Bangladesh under the WTO.

The ITC also fixed September 16 the deadline to submit comments for a public hearing on the legitimacy of the demand for the duty-free access facility.

"As the WTO ministerial meeting is due in December, the US government wants to be ready for talks on the basis of the study findings," said an official of the ministry of commerce (MoC).

"Bangladesh too has been preparing to oppose the US claim of export increase from the LDCs," the official added.

Bangladesh has long been demanding the duty-free access of its apparel and textile products since the WTO's Hong Kong meeting's decision to provide duty-free access facility for the LDC member-countries in their exports to the developed and developing countries.

Although the European Union (EU) through the `everything but arms' facility has given the facility to the LDCs, the United States has long been denying the privilege for its having 'good investments in Africa' and a bilateral agreement with the African Group of Association (AGOA).

The MoC will hold a stakeholders' meeting next week as a step to participate in the public hearing to oppose the claim of the US government.

"We will place our observations as well as request the associations concerned to place theirs in the public hearing," the commerce ministry official said.

The latest US statistics, which was shared during the WTO Trade Negotiation Committee meeting on July 26, showed that Bangladesh export to the US market has increased 107 per cent since 2004, even though duty was imposed on the country.

In spite of the duty bar on the LDCs, the export of Cambodian products to the US market also increased by 58 per cent, while export of African products with duty-free facility decreased by 53 per cent.

Bangladesh Garments Manufacturers and Exporters Association (BGMEA), however, contradicted the US claim and said the export of apparel products and textiles has been negative in so far as US market was concerned.

As the import cost of the apparel and textile industries of the country has increased, the export earnings could not be enjoyed in the real term.

While month-to-month statistics of export is considered, the sector appears to have suffered a number of setbacks, said a BGMEA official.

"We will highlight the increase of import cost and Bangladesh's huge expenditure for buying raw materials, like cotton, from the US to show the legitimacy of the demand," the commerce ministry official said.

"There is no logic in penalising Bangladesh for its efforts to increase export to the US market by putting restrictions. Besides, there is no way for a sub-category for the country among the LDCs," the official further said.