BGMEA seeks duty-free access to US market

Bangladesh’s apparel manufacturers are seeking duty-free market access to the US for their cotton made clothes considering as Bangladesh government eased the rules of mandatory fumigation tests for importing cotton from Western Hemisphere countries or other US regions.

Manufacturers think that if the US government will consider their demand, they will be inspired to use the country-based cotton, which will help the US cotton producer to get more earnings from the Bangladeshi market.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan sent individual letters to the Texas State senator Ted Cruz, Governor Greg Abbot, US ambassador to Bangladesh Peter Haas on March 27 regarding on the issue.

According to the BGMEA, Bangladesh is the second largest apparel exporters among the world and the US is their largest single country market. On 2022, the US imported $9.74 billion clothes from Bangladesh while 71 per cent was cotton based. During the period the US imported $47.51 billion cotton based apparel while Bangladesh share was 14.54 per cent.

Besides, Bangladesh exported $45.71 billion clothes in 2022, while $32.86 billion worth of cotton garments. In the same year the country imported 4080 million pounds of cotton from the world of which almost 409 million pounds were imported from the US.

BGMEA President Faruque Hassan told The Business Post, “Importing US cotton was not easier and that is why we imported their cotton less than the demand. But the government eased the rules of mandatory fumigation tests for importing cotton from the US, which will certainly make trade easier and reduce time and cost of importing cotton from the US”.

“If the US government will allow duty-free market access for their cotton-based product, the US cotton producers and our manufacturers will be beneficiary.”

BGMEA President said in the latter that 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 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,” he said in the latter.

He continued, “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.

“Given our growth potentials and duty free import facilities of cotton in Bangladesh, the US cotton growers and exporters can further exploit opportunities if duty free access is granted to apparel made of US cotton.”

“Especially the proposed duty free treatment will benefit US cotton through increased demand and earning premium price,” he added.

The latter mentioned, “Duty-free access to clothing made in Bangladesh will also benefit US consumers, especially the middle and lower-income groups for whom clothing and other essentials comprise a major share of expenses”.

As the apparel items face highest tariffs, the waiver will be beneficial for both US consumers and its cotton growers in this difficult time. On a brighter note, we hope global economy, retail business and trade will start coming back in 2024 while the demand for cotton will further increase.