Bangladesh urges more access to US for textiles

DHAKA - Bangladesh on Wednesday renewed its plea for duty-free access of its ready-made garments into the U.S. market to help spur the South Asian country's economy, create jobs and reduce poverty.

By (Reuters)

Published: Wed 23 Apr 2008, 7:21 PM

Last updated: Sun 5 Apr 2015, 11:43 AM

Bangladesh earned $3.1 billion by exporting ready-made garments to the United States, a third of total export earnings from the textiles sector, in the fiscal year ending June 2007.

"Our economy will be boosted further if we can export our ready-made garments to U.S. markets without tariffs and it will create nearly 200,000 new jobs, particularly for women," said Abdus Salam, vice-president of the Bangladesh Garments Manufacturers and Exporters Association.

He said that at present about 12 million of Bangladesh's 140 million people were directly and indirectly engaged in the ready-made garments sector, which accounts for more than three fourths of Bangladesh's total exports.

"The U.S. is the single largest export destination for Bangladesh and exports might rise substantially if we get duty-free access, like other least-developed countries that have already boosted their export income," Salam said at a meeting of trade union and business leaders, senior government officials, representatives of development partners, economists and lawyers.

The textiles sector in Sub-Saharan African countries had been growing at an average rate of 13 percent between 2001 and 2005, largely due to duty-free access to the United States, said a manufacturers and exporters association research paper circulated at the meeting.

Currently, Bangladesh on an average has to pay a 16 percent tariff for exporting to the United States.

Bangladesh's exports hit a record $12.18 billion in the past fiscal year that ended in June 2007, of which more than $9 billion came from garments. The country has set a $14.5 billion export target for the 2007/2008 fiscal year, up 19 percent from the previous year.

Election year

Edward Gresser, director of the Progressive Policy Institute, a Washington-based think tank, said they were working on how U.S. trade preference for least-developed economies (LDCs) was affecting and also could benefit LDCs, such as Bangladesh.

"Although this is the election year for us, still a law for duty-free access for LDCs including Bangladesh may be enacted, but it is more likely to take effect in the year 2009," Gresser, an economist, told the meeting.

But Shabbir Ahmed, the chairperson of THE U.S.-Bangladesh Advisory Council, who is trying to persuade the Bush administration to grant duty-free access, warned against being too optimistic.

"Bangladesh should expand its import market to the U.S. and should import more cotton from there as business relationships should be about two-way traffic," Shabbir, a Bangladeshi-born U.S. citizen, said.

Bangladesh spends $1.1 billion to meet its total annual demand of 2.7 million bales of cotton and procures 65 percent of it from Uzbekistan. It also imports cotton from India, Pakistan, Turkmenistan and the United States.

Kamal Hossain, a Bangladeshi legal expert and a former foreign minister, urged garment factory owners to comply with social issues to improve the industry's image overseas and to boost growth.

"To pay less is a back-dated concept and neither firms nor the sector will benefit from poor payments," said Kamal, a barrister and one of Bangladesh's top lawyers, referring to wages.

Disputes over wages have prompted textile workers in Bangladesh to stage violent protests and strikes at factories.