Dhaka to seek duty free access for RMG

During the US Secretary of State Hillary Clinton's visit, Bangladesh will demand resolving some long-pending issues like duty-free access, GSP and Ticfa to remove trade barriers between the two countries.
Hillary comes to Dhaka this afternoon on a two-day official visit.
The demand for duty-free entry of garment items in the US market, the single largest export destination of Bangladesh, is a years-long issue as Bangladesh, despite being a least developed country, has to pay high tariff for the access.
“Ticfa [Trade and Investment Cooperation Framework Agreement] might not be signed during Hillary Clinton's visit. But, the issue will be discussed,” a highly-placed commerce ministry source told The Daily Star yesterday.
Ninety-seven percent Bangladeshi goods have duty-free access to the US market, but the list does not include garment, the main export item of the country.
At present, Bangladesh pays on an average 15.3 percent tariff for garment products to enter the US market whereas China, world's largest apparel supplier, pays 3 percent duty on an average to access the same market.
Bangladesh's garment is now enjoying duty-free facility to the EU and in Japan, two developed trade blocs. But, the US is still to give the facility although it should allow the facility to the least developed countries under the Doha Round of 2001.
Talking to The Daily Star, Executive Director of Centre for Policy Dialogue Mustafizur Rahman said Bangladesh should continue dialogue with the US.
Bangladesh pays the US more than $600 million in duty per year, which is almost equivalent to the annual aid the country gets from the US, he added.
Last year, Bangladesh exported goods worth $4.59 billion to the US and imported goods worth $1.09 billion, according to the American Chamber of Commerce in Bangladesh.
China's export to the US was $377.33 billion during the same period.
In 2010, Bangladesh's export to the same market was worth $4.30 billion, while import $577.5 million. The amounts were $3.70 billion and $434.6 million respectively in 2009, the data shows.
Ninety percent exports to the US from Bangladesh comprise garment and textile items and the remaining 10 percent ceramics, frozen foods, jute goods, agro-products, raw jute, leather, tea and chemical products.
The Obama administration renewed the Generalised System of Preferences (GSP) scheme for the least developed countries on September 22 last year.
The scheme allows duty-free export of about 4,800 products from 131 countries to the US. But exports from Bangladesh under the system are very minimal as the country is not a strong producer of those goods.
In January this year, the US government excluded Bangladesh made sleeping bag from the list of GSP reasoning that it was hurting its domestic industry.
Bangladesh has appealed against the exclusion and a decision on the matter is pending, official sources said.
On the other hand, signing of the Ticfa has been a long-time demand of the US. The Trade and Investment Forum Agreement (Tifa) was revised and then renamed Trade and Investment Cooperation Forum Agreement (Ticfa) by the US government.
When signed, Ticfa will offer a platform for Bangladesh and the US to discuss bilateral trade issues, including the trade barriers and opportunities and also investment in the two countries.
Last month, the commerce ministry sent a draft of the agreement to Prime Minister Sheikh Hasina for her approval.
Contacted, Federation of Bangladesh Chambers of Commerce and Industry President AK Azad on Thursday said, “Duty or no duty, political stability is a must for us for maintaining higher export to the US market.”

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