US examining duty-free facilities for Bangladeshi goods: Commerce secretary

The United States is reviewing ways to provide duty-free benefits to Bangladesh for exports of items not on the Sensitive List of the GSP, said Senior Secretary of the Ministry of Commerce Tapan Kanti Ghosh on Wednesday (20 September).

The benefits could be extended to the export of garments made from cotton imported from the US, he told reporters following a meeting of the Trade and Investment Cooperation Forum Agreement (Ticfa).

At present, Bangladeshi products require a 15% duty.

The latest assurance from the US side came during the seventh Bangladesh-US Trade and Investment Cooperation Forum Agreement (Ticfa) Council meeting in Dhaka today.

After the meeting with the US delegation, led by Brendan Lynch, acting assistant US trade representative for South and Central Asia, Tapan told reporters, "They [US delegation] told us that they are working to provide duty-free benefits for exporting goods which are not on the Sensitive List of GSP along with the garments made from cotton imported from them."

"They will discuss the matter with their high officials," he added.

The commerce secretary also said, "About 14% of Bangladesh's cotton demand is met through imports from the United States. I asked them to give duty-free benefits to garments made from these cotton. They took notes and said they will discuss the matter."

Earlier, a statement from the US embassy in Dhaka said the United States has encouraged Bangladesh to extend freedom of association and collective bargaining to Bangladesh's Special Economic Zones (SEZs) and the Export Processing Zones (EPZs).

During discussions today, the US made the recommendation noting that a tripartite labour law review committee is reviewing the amendments to the Bangladesh Labour Act (BLA).

The commerce minister had earlier said the readymade garments industry in Bangladesh would be benefited if the USA approves duty-free facilities in cotton import.

Bangladesh is the second largest RMG exporter in the world and imports a huge amount of cotton every year from different countries. On the other hand, the USA is the largest cotton exporter.

Bangladesh needs around 9 million bales of cotton every year for RMG exports. But the country produces only 1.50 lakh bales of cotton annually, which is only 1.6% of the total demand.

The US lauded Bangladesh's actions to remove cotton fumigation requirement on US cotton exports, a long-standing issue that had persisted for over twenty years. The United States and Bangladesh cooperated on agricultural biotechnology dialogue and look forward to deepening their engagement this year. 

During the TICFA Council meeting, the United States and Bangladesh discussed a range of issues impacting the bilateral trade relationship, most notably labour reforms, as well as policies impacting the investment climate and digital trade, intellectual property protection and enforcement, and bilateral cooperation in the agricultural sector, sources said.

The United States conveyed to Bangladesh that working with trading partners to support workers' rights, including freedom of association and collective bargaining, is a top priority for the Biden-Harris Administration. The United States emphasised the importance of combating violence against workers and union organisers, as well as anti-union discrimination and other unfair labour practices, said the press release by the US embassy.

The United States recognised that Bangladesh had undertaken some efforts to address hurdles workers face when registering unions, and stressed the importance of ensuring a simplified and impartial trade union registration process that allows for applications to be registered within the legal timeframe. Additionally, the United States urged Bangladesh to dedicate more resources to labour inspections and enforcement.

The United States appreciated the Bangladesh government's consistent dialogue over the past year on Bangladesh's Data Protection Act (DPA). Both sides affirmed their commitment to the protection of personal data and ensuring that Bangladesh's digital sector continues to thrive while ensuring trust in the digital economy. Bangladesh's newest version of the DPA draft incorporated improvements from earlier versions, including the removal of criminal penalties, restricting the scope of the DPA to personal data, and limiting application to firms that process personal data within the territory of Bangladesh.

Both countries recognised the importance of the protection and enforcement of intellectual property (IP) for protecting innovation across economies.  The United States also reiterated its interest in engaging with Bangladesh on ongoing processes for amendments to IP-related laws and regulations, including the Copyright Act Amendments, Industrial Designs Act, Patent Bill, and Implementing Regulations and IPR Enforcement (Import and Export) Rules.

In addition, the United States discussed actions needed to address concerns with Bangladesh's ranking as one of the top five source economies for counterfeit clothing globally, as noted in USTR's 2023 Special 301 Report.

Both delegations planned to continue dialogue on these important bilateral trade issues before the next TICFA Council Meeting, which will be held in Washington, DC in 2024.

The US-side is expected to bring up the challenge faced by American companies in repatriating their profits from investments in Bangladesh.

This issue has arisen due to the ongoing dollar crisis in Bangladesh, affecting several US firms, such as MetLife Insurance, which have encountered difficulties in repatriating their profits from Bangladesh.

Several US investors in Dhaka met with the governor of the central bank earlier this month and discussed the issue.

Commerce ministry officials confirmed earlier that the US delegation plans to raise this matter as a priority during the discussions.

Bangladesh was supposed to insist on facilitating the registration of Bangladeshi pharmaceutical products in the US and getting financing from the US International Development Finance Corporation, the commerce secretary said as reported on The Business Standard on 18 September.

This meeting marks another chapter in the ongoing dialogue between the two nations since the signing of the Ticfa in 2013, serving as a platform to identify and address various obstacles to bilateral trade and investment.