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Bangladesh can count on US to brave post-LDC challenges

24 May 2023 00:00:00 | Update: 23 May 2023 23:51:04
Bangladesh can count on US to brave post-LDC challenges

Bangladesh’s imminent graduation to a developing country is a significant achievement that comes with a unique set of challenges. The US can share expertise in areas such as economic diversification, sustainable development, infrastructure development and capacity building to overcome challenges, Brendan Lynch, Acting Assistant US Trade Representative for South and Central Asia, tells The Business Post’s Ibrahim Hossain Ovi in an interview

Bangladesh is set to graduate to a developing country by 2026. How can Bangladesh get support from the United States to overcome and face post-graduation challenges?

Bangladesh’s imminent graduation to a middle-income country by 2026 is a significant achievement that comes with its unique set of challenges. The United States recognizes the importance of supporting Bangladesh during this transition and stands ready to provide assistance in every possible way.

First, the United States can share expertise in areas such as economic diversification, sustainable development, infrastructure development and capacity building. In addition, the United States can support Bangladesh through trade and investment cooperation. By promoting bilateral trade and encouraging US companies to invest in Bangladesh, the United States can contribute to the country’s economic growth, job creation and technology transfer.

The US is the single largest export destination for Bangladesh and exports reached $10 billion in 2022. What trade benefits can the US offer Bangladesh to increase export further?

We are looking at areas where the two countries can work together such as trade facilitation, trade capacity building and other technical assistance, investment promotion and market diversification. The United States can play a crucial role in supporting Bangladesh’s efforts to increase its exports further, contributing to economic growth, job creation, and sustainable development.

The US is a great source of importing cotton as Bangladesh imports a good amount of cotton. What are the options to increase cotton imports to boost bilateral trade between Bangladesh and US?

The US is one of the biggest cotton producing countries in the world and US cotton is high quality and cost-competitive. The US will continue to be a major export destination for apparel items made in Bangladesh, especially those made of cotton. Washington is working with Dhaka to continue improvement in the labor conditions in Bangladesh’s factories, making Bangladeshi products, including cotton garments, more attractive to US importers.

Bangladeshi exporters are demanding duty-free market access for RMG products made of US cotton. Do you think it is possible or have any plan to do so?

In the US, tariff preferences are the purview of Congress. Bangladesh supplied close to 10 per cent of the total US apparel imports. Despite the lack of tariff preferences, Bangladesh is the third largest supplier to the US market, with a record $9.7 billion in apparel exports to the US in 2022, up from $5.9 billion in 2019. We continue to expect Bangladesh to be a competitive supplier to the US market.

After Rana Plaza collapse, Bangladesh’s RMG sector faced severe challenges in safety standards. Currently, Bangladesh has the highest number of green factories in the world certified by US Green Building Council. Over the past 10 years, we have made some progress. What is your comment on Bangladesh’s workplace safety and labor rights condition right now?

The US recognizes that Bangladesh has made significant progress in fire and building safety in the export-oriented ready-made garment sector. The 10th anniversary of the Rana Plaza tragedy in April serves as a stark reminder of the tremendous progress Bangladesh needs to make, such as creating a culture of workplace safety and to protect workers’ voices so that they can organize, form unions, and collectively bargain without fear of reprisal. 

Bangladesh is doing better in non-leather footwear exports. What is your suggestion for increasing exports to the United States and what kinds of facilities you can offer to our exporters?

Bangladesh’s impressive growth in non-leather footwear exports to the US presents a promising opportunity. To further boost exports, we encourage Bangladeshi exporters to focus on market research, product diversification, and innovation. We are committed to providing market intelligence, assisting with compliance to international quality standards, and supporting the development of sustainable and eco-friendly practices. By working together, we can strengthen trade ties and facilitate the expansion of Bangladesh’s non-leather footwear exports to the US market.

Many developed countries have built Special Economic Zones (SEZs) in Bangladesh. Why does the United States have not one yet?

The US values its economic relationship with Bangladesh and acknowledges the success of Special Economic Zones in other countries. In Bangladesh, however, the US encourages a more broad-based approach to economic engagement, which includes fostering a conducive-business environment, supporting entrepreneurship, and promoting investments across different sectors. This approach allows for flexibility and enables US companies to explore investment opportunities throughout Bangladesh, rather than being limited to a single designated zone.

What kind of capacity building efforts on logistics and supply chain can the US government provide to Bangladesh to improve ports’ performance?

The US is committed to supporting Bangladesh in enhancing its port performance and strengthening logistics and supply chain capabilities. Through capacity building efforts, including technical assistance, training programs, and infrastructure development, we can improve port operations and promote efficiency. In addition, we can collaborate on customs digitalization initiatives and provide guidance on regulatory frameworks to facilitate seamless cargo movement.

Which sector in Bangladesh is the most profitable and demonstrates the most potential to the US investors?

Several sectors in Bangladesh hold significant potential of profitability for US investors. American businesses are keen to invest in healthcare, digital economy, technology infrastructure, dredging, and many other areas. Bangladesh’s economy offers opportunities for mutually beneficial partnerships across various industries, reflecting the country’s potential commitment to fostering a conducive-business environment.

Bangladesh faces an acute energy crisis. Is there any plan from the US government or US private companies to invest in gas exploration in this country?

The US has a long history of supporting Bangladesh’s energy sector, including gas. Collaborative efforts and partnerships between the two countries can help leverage expertise, technology, and capital to further support gas exploration.

The US understands Bangladesh’s need for energy, and we are working closely together to meet this need. US companies are eager to invest in the energy sector. They are going beyond traditional energy to renewable energy and other sustainable forms of energy. By fostering energy cooperation, we aim to contribute to the sustainable development of Bangladesh’s energy resources and promote long-term energy stability.