John Fay, commercial counselor of the US Embassy, said there is a possibility of reducing the duty on export of garment items to the USA from Bangladesh.
Fay was addressing a seminar on Bangladesh - US trade and investment, organsied by the Economic Reporters' Forum (ERF) at its auditorium in the capital.
The Commercial Counselor, however, did not elaborate it in his speech.
But, he mentioned some challenges in investment in Bangladesh such as problem of profit repatriation, intellectual property rights, data protection act and challenges of logistics services. "There is a big potential of the USA for investment in healthcare, ICT, education for investing in Bangladesh by the American investors," Fay also said.
Fay suggested Bangladesh for improving in the labour rights, labour law reforms and freedom of association for reviving the GSP, which is lapsed now since December 2020. The US Congress did not take new scheme until now.
Mohammad Abdur Razzaque, research director of the Policy Research Institute (PRI), while presenting the keynote paper said, Bangladesh's garment export to the USA is possible to increase between $400million and $800million every year if the US government arranges a cotton GSP scheme to waive the duty on locally made apparel from the imported cotton from America and re-exported to the USA.
Quoting a study, he said the USA can also export $3billion worth of cotton to Bangladesh in next five to six years if the USA government allows Bangladesh duty-free export of locally made garment items to the American market made from the imported cotton of the USA.
A cotton GSP scheme is a special scheme that the US can take for Bangladesh to allow duty-free export of garment items to the American market but made from the imported cotton from the USA.
Over the last few years, the local garment suppliers and the government have been negotiating with the American government for allowing 15.62 percent duty waiver on the garment items exported to the USA but made from the imported cotton from America.
Economists, business leaders, exporters and diplomat attended the seminar.
Razzaque, who is also the chairman of the Research and Policy Integration for Development (RAPID), a private think tank, said Bangladesh should also ensure the fibre security in future as Bangladesh does not produce less than two percent of the required nine million bales of cotton and almost the entire demand is met through import and USA is becoming a good source for the fibre gradually.
"Only the sky is the limit for attracting investment from the USA in different sectors in Bangladesh," said Masrur Reaz, chairman of the Policy Exchange of Bangladesh, a private think tank.
He said, currently, Bangladesh is the second largest garment exporter worldwide and third largest manufacturing hub for large volume and low valued garment items worldwide. However, Bangladesh needs to improve the border and customs clearance for attracting more foreign direct investment, Reaz also said.
Urging for reinstating the GSP status for Bangladesh, Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the cotton GSP scheme will be a win-win situation for both countries as the local millers import 11.5 percent cotton of the total nine million bales of required cotton is imported from America.
Bangladesh has a lot of scope to explore the US markets as the local suppliers can meet 9.7 percent demand of the total import of apparels by the USA in a year. For instance, Bangladesh is now the top denim garment exporter with shipping more than $1.0 billion worth of denim items to the US in a year, and third largest garment exporter to the USA after China and Vietnam.
An ample opportunity is waiting for Bangladesh in non-cotton category to the US market, Hassan also said. "I hope USA will consider the revival of the GSP as Bangladesh has complied with the 16 point Bangladesh Action Plan provided by the US government to Bangladesh for GSP reinstatement,"
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA), said currently Bangladesh imports 20 percent cotton from India, 11 percent from USA and 3.0 percent from Australia.
He said the Joe Biden Administration should follow the fifth Ministerial Conference of the World Trade Organisation (WTO) held in Hong Kong in 2005 where the developed countries agreed to give duty-free trade benefit for 100 percent products, but the USA is giving on 97 percent products and unfortunately in garment items is not included in this 97 percent package.
Fazlee Shamim Ehsan, vice-president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh has done a lot in terms of workplace safety but the USA is not recognising as the GSP is still suspended for Bangladesh since June 2013.
Shams Mahumd, managing director of Shasha Denims Ltd said Bangladesh has not been getting much work orders those which are shifting from China as most of those orders are going to other countries like Cambodia, Vietnam and in African countries mainly to take the zero-duty benefit under the African Growth and Opportunity Act (AGOA).
ERF President Mohammad Refayet Ullah Mirdha chaired the seminar while its General Secretary Abul Kashem moderated it.
Source: Bangladesh Sangbad Sangstha