trade relationship between bangladesh and usa

8/13/2019 Trade Relationship Between Bangladesh and USA

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Trade between Bangladesh and USA

Abdur Rahman

Roll:- 1794

Abstract

This Asia Society Trade and Investment Report, “Enhancing Investment Relations between the United States and Bangladesh,” is intended to assist the Bangladeshgovernment in its eorts to meet !rime "inister Shei#h $asina%s &ision '(') targets,which see# to ma#e Bangladesh a middle*income co+ntry This is an ambitio+s goal, andin order to achieve it, Bangladesh will re-+ire signiicant increases in economic growth,trade, and oreign investment

In this eort, the US government can play an important role by helping to improve bilateral trade and investment relations with Bangladesh and by raising awarenessamong US corporations abo+t the growing investment and trade opport+nities inBangladesh

Introduction

The direction o this report has been g+ided by a ).*member Advisory /ommitteecomposed o representatives rom Bangladesh%s government, private sector, andnongovernmental organi0ations, along with US and other private*sector, nonproit, and

academic proessionals, all o whom have e1tensive e1perience wor#ing with Bangladeshand other emerging*mar#et co+ntries The Advisory /ommittee members are ac+telyaware o the co+ntry%s s+bstantial achievements in recent years, as well as the signiicanteconomic and social challenges that c+rrently ace the Bangladesh government 2evertheless, the Advisory /ommittee representatives +nanimo+sly believe that there isnow a critical window o opport+nity or Bangladesh to ma#e ma3or economic progressthro+gh the rapid growth o trade, investment, and employ

Methodology of study followed

The methodology ollowed or the st+dy comprised o s+rveys, des# research, ieldst+dies, interview and disc+ssions with the #nowledgeable people Relevant papers,reports, government ga0ette notiications, newspapers reporting were reviewed in thedes# research phase Interviews and disc+ssions were held with the assemblers4entreprene+rs, importers, concerned oicials o the government agencies, tradeassociations, ban#ers, a+tomobile wor#shop owners, comp+teri0ed servicing centers,local agent o branded a+tomobile companies, a+tomobile technicians and e1perts, etcor ob3ective analysis o the sector 5ata has been collected rom both primary andsecondary so+rces or necessary analysis


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Bangladesh

According to the International "onetary 9+nd ;I"9


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Bangladesh was the United States8 7@th largest goods e1port mar#et in '())

US goods e1ports to Bangladesh in '()) were D)) billion, +p 6@?H ;DC@ million<rom '()( and +p .76H rom '(((

The top e1port categories ;'*digit $S< in '()) were= /otton, arn and 9abric ;D..?million


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Imports

()

('

(C

))

'?

.7

.7

?.

?6

In"estment

US oreign direct investment ;95I< in Bangladesh ;stoc#< was D)67 million in '()(;latest data available


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acility

Unli#e E+ropean Union%s S!*spread that covers everything b+t arms, the S! in USAas o now covers only (C? percent o Bangladesh e1ports to the co+ntry, which in val+eterms was US5 ' million in '()), covering tobacco prod+cts, sports e-+ipment,

#itchenware and plastic articles Bangladesh e1ports to the USA in '()) were US5 ?@@ billion Then, why sho+ld we be so concerned M es, there are reasons to be not onlyconcerned, b+t panic#ed as o+r b+siness leaders elt N altho+gh the vol+me o theBangladesh prod+cts e1ported to the US mar#et +nder the S! scheme is veryinsigniicant, the co+ntry%s image wo+ld gravely be tarnished i the beneit is cancelledRetention o S! beneit is a prestige or Bangladesh, as it reers to labo+r standards,wor#ing condition and saety and sec+rity o the wor#ers, having cascading eect on o+re1ports to other destination too

:n an+ary @, this year USTR so+ght comments rom the sta#eholders on the possiblewithdrawal, s+spension or limitation o S! beneits to Bangladesh based on the

allegation that Bangladesh did not ma#e m+ch progress in addressing wor#ers% rightsThe government has already p+t +p a Oposition paper% highlighting the progress so armade and serio+s commitment to p+rs+e the Ola+ndry list% identiied A committee isleaving or USA to attend the hearing on "arch '@ and deend Bangladesh ca+ses Jewill o co+rse want Bangladesh ca+ses to be d+ly heard, attended and recognised Alongwith o+r ind+stry leaders, we do not want the US S! to be canceled 2or o+r labo+rleaders or even the wor#ers want this to happen

Bangladesh has emerged as a respectable trading partner among the Oleag+e o nations%, b+t co+ld not command a lot o respect or its poor governance and wea# labo+rstandards and wor# place saety /o+pled with this, Bangladesh oreign policy towardsUSA ailed to do 3+stice to the +nderlying interest o its people and the b+siness as awhole Jhile in today%s world we are redeining and replacing diplomacy withcommercial diplomacy, Bangladesh is somehow bac#trac#ing with its archaic model o bi*lateral relationship based on past events or e1perience

Je sho+ld loo# at &ietnam, who o+ght a long devastating war with United States oAmerica and now en3oys Omost avo+red nation% stat+s 2obody can g+arantee, theywon%t see a US base in the near +t+re in &ietnam I am s+re, i that commercially andeconomically beneit the &ietnamese people witho+t h+rting their core val+es, they won%tmind US o co+rse did not want m+ch rom Bangladesh They wanted Bangladeshactories to ollow respectable labo+r standards, recognise the Orights to orm associationor +nions% and on a broader perspective oc+s more on Oinstit+tion b+ilding%, not dentingthe pro+d instit+tions li#e rameen Ban# or the O+diciary%, which at the end o the daysaeg+ard common people%s interest

Bangladesh is very m+ch poised towards becoming a trading giant with its hard wor#ing people and innovative entreprene+rs overnment in the past did a good 3ob with regardto e1tending policy s+pport to o+r entreprene+rs, especially the apparel e1porters Jenow, cannot aord to go bac#, while the emerging challenges are m+ch more Je need to


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ma#e new riends among US decision ma#ers, +se Bangladesh Oidols% to wor# or o+r b+siness to open +p more potential in the US and most importantly develop a m+t+allyrewarding relationship with this signiicantly important co+ntry or o+r e1ports, yo+ngst+dents as well as +t+re proessionals Je want more Omade in Bangladesh% to enter theUnited States in order to ens+re that we play o+r cards well

)SBC Global Connections 3e(ort $ Bangladesh

Trade 9lows P E1port growth sho+ld pic# +p in '().4)?, helping to lit 5! growth bac#above H The US will remain the top mar#et or Bangladeshi e1ports in '(.(, b+t b+oyant intra*Asian trade lows will prove more dynamic in terms o growth

Sector Insights P Jage competitiveness has boosted the man+act+ring ind+stries inBangladesh and clothing will contin+e to be the largest e1port ind+stry, representing overa third o total e1ports

4"er"iew of 5resent Situation

5! growth in Bangladesh is e1pected to improve a little to ?H in iscal year '()'4).on the bac# o rising ind+strial prod+ction and retail sales $owever, the sl+ggish e1ternal bac#gro+nd, and tight monetary conditions d+e to high domestic inlation might dampenthis e1pected rebo+nd Foo#ing ahead, e1port growth is e1pected to pic# +p in '().4)?,in line with the anticipated global recovery, helping to lit 5! growth to H

The top three mar#ets or Bangladeshi e1ports are the US, ermany and the UKAltho+gh US growth loo#s relatively s+bd+ed, it will nevertheless remain the world%slargest cons+mer mar#et or some time It will thereore remain an attractive destination

or e1porters in Bangladesh

Jhilst the top three e1port destinations will be +nchanged o+t to '(.(, by this time Indiawill have become a m+ch more important e1port mar#et, ran#ing o+rth in the e1portleag+e table Bangladesh is very well located at the centre o emerging Asia, the mostdynamic trading region in the world E1ports to Asia ;e1cl+ding apan< are orecast torise by ).*)?H a year rom

Jages are lower in Bangladesh than in many /hinese regions and So+th*East Asianco+ntries and this competitiveness advantage has enabled low*cost man+act+ringind+stries s+ch as te1tiles to grow rapidly over the past decade Advanced economies

largely b+y low val+e*added man+act+ring goods rom Bangladesh s+ch as clothing,ootwear and toys This is orecast to contin+e, with clothing and apparel e1pected tocontrib+te over a third o e1port growth in the years to '(.(, and te1tiles and woodman+act+res contrib+ting nearly a third o the total growth in e1ports d+ring '(')*.(

A large amo+nt o capital spending is e1pected in Bangladesh over the ne1t twenty yearsas the economy develops a more sophisticated inrastr+ct+re networ# in order toenco+rage more 95I lows, driving imports o ind+strial machinery B+t te1tiles and


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wood man+act+res will contrib+te most to import growth in coming years, as theman+act+ring sector imports the materials it re-+ires to s+pport prod+ction

Top 9ive E1port 5estinationsQ

3an6 2/,, 2/7/

) USA USA

' ermany ermany

. UK UK

? 9rance India

C /anada /hina

Top Three Import and E1port Sectors in Bangladesh '()) and '(.(Q

American Chamber of Commerce in Bangladesh

The American /hamber o /ommerce in Bangladesh ;Am/ham< was ormallyestablished in )66 having been d+ly registered with the oint Stoc# /ompanies oBangladesh to promote the economic relationships between Bangladesh and the UnitedStates Earlier, Am/ham +sed to operate as American Bangladesh Economic 9or+m;ABE9< since )6@@ Am/ham holds the +ll "embership o the Asia !aciic /o+ncil oAmerican /hambers o /ommerce ;A!/A/


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;A!/A/< and the US /hamber o /ommerce, in order to present the views oUS b+siness comm+nity in Bangladesh to the United States overnment

!eriodic Brea#ast4F+ncheon45inner meetings or members to hear prominentlocal or visiting spea#ers, high government oicials, ministers etc and disc+ssiss+es o commerce, investment and economics

Sponsoring seminars on vital iss+es o inance, trade and commerce

Establishing contact between the American b+siness comm+nity and theestablished b+siness and government organi0ations o Bangladesh

S+pport US investment in Bangladesh

Jor# as contact point or US b+siness in Bangladesh

Underta#e research on vital iss+es o economic interest with a view to identiy the problems, opport+nities and recommend action and policies to overcome the snagson the way to progress

:rgani0ing US Trade Show in Bangladesh on ann+al basis with the cooperation othe United States Embassy

!eriodic news b+lletins other p+blications

Fibrary and reerence acilities or member +se

!articipation in #ey events and services o the Asia !aciic /o+ncil o American/hambers o /ommerce ;A!/A/< and the US /hamber o /ommerce

trade with US approaches $b

Jith the ann+al trade t+rnover between Bangladesh and the United States approaching tothe t+ne o D billion this year, some ma3or US brands are reportedly contemplating toe1pand their b+siness in Bangladesh%s ast growing mar#et o cons+mer prod+cts

E1ports o Bangladeshi garments to USA increased +rther in recent months while USgiants li#e !roctor amble and ohnson ohnson had enco+raging s+rge in sales otheir prod+cts in Bangladesh, so+rces in b+siness circle told 2ew Age


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OTrade t+rnover between Bangladesh and USA is e1pected to s+rpass D billion by theend o the c+rrent iscal year till +ne,% said an oicial o the 9ederation o Bangladesh/hamber o /ommerce and Ind+stry

The E1port !romotion B+rea+ :icials said Bangladesh%s e1port earnings rom USA in

nine months to "arch o the c+rrent iscal year recorded D.7 billion In )' months othe last iscal year, e1ports to USA amo+nted D.6C billion

Atab Ul Islam, president o the Am/ham has similar estimate as he scans more than .( percent growth in bilateral trade Interestingly, the US e1ports to Bangladesh are growingat a aster rate

According to oicial ig+res, US e1ports to Bangladesh grew by more than @. percent toD?7) million in eight months to 9ebr+ary o the c+rrent to iscal year

Bangladesh imported h+ge -+antities o cotton, wheat, soya bean, power engines and

diversiied prod+cts rom the United States

Atab sees that with import bills o previo+sly contracted US made aircrat orBangladesh%s civil aviation sector, to be added by the end o this iscal year, e1port ig+rein avo+r o USA may cross even one billion dollar

ORecent growth in e1ports rom USA and sales o US prod+cts in Bangladesh is verye1citing,% said Atab, also ormer director o 9ederation o Bangladesh /hambers o/ommerce and Ind+stry

The Am/ham president also inormed 2ew Age that some big US companies, other than

oil and gas sector players, have set their sight on the Bangladesh mar#et and they areserio+sly considering investments in Bangladesh

US cons+mer goods giants !roctor amble and ohnson ohnson are contemplatings+bstantial investments on prod+ction acilities in Bangladesh as local mar#et o 9ast"oving /ons+mer oods has become enco+ragingly big, Atab said

At present ! brands li#e !entene, $ead Sho+lders, :lay, illette, Tide and5+racell are sold well in Bangladesh thro+gh imports while ohnson ohnson babycare prod+cts are also established in Bangladesh mar#et B+t the US brands cost highhere d+e to high d+ty, Atab says

O!rod+ction in Bangladesh will give them US brands competitive edge or e1pandingmar#et,% he said OBangladesh can be low cost man+act+ring centre or the UScompanies and prod+cts man+act+red here can also be e1ported to "iddle East and otherAsian mar#ets%

The 9"/ mar#et watchers say good perormance o Unilever, having aro+nd DC((million dollar ann+al t+rnover in Bangladesh, might have opened the eyes o D@( billion


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pl+s ! and D( billion pl+s ohnson ohnson on Bangladesh%s ast growing mar#eto middle*class cons+mers

:icials o the Bangladesh arment "an+act+rers and E1porters Association see thatthe co+ntry%s e1port proceeds rom USA will cross DC billion in the c+rrent iscal year

with more than o+rth*iths o that coming rom e1porting mainly apparels and somecategories o home te1tiles li#e bedding and towels

Oood growth in shipments to USA is almost ascertained or the coming months ase1porters are wor#ing on shipments and conirmed orders are in their hands,% said E1port!romotion B+rea+ vice*president alal Ahmed

B"EA president Shai+l Islam "ohi+ddin is also hope+l abo+t US mar#et as economythere is recovering with increased employments OJhen cons+mer conidence getsstronger, sale o prod+cts increases So, we e1pect more shipments o Bangladesh madeapparels to USA%

"ohi+ddin says the US importers will need to proc+re increased vol+mes o low andmiddle end categories o apparels rom Bangladesh and other alternative Asian so+rces as/hinese man+act+rers are grad+ally abandoning b+siness in those items

$e, however, said that i there wo+ld be d+ty*ree access to USA, Bangladesh%s apparele1ports there co+ld have been do+ble or more than what is now

Echoing "ohi+ddin, Am/ham%s Atab also says that e1panded American demand l+redmore US importers to Bangladesh Orowth in Bangladesh%s e1port to USA will contin+eor long%Bangladesh 9oreign Trade between USA and Bangladesh

Jaterborne oreign imports rom Bangladesh to the United States in '()( totaledD.,67?,(77,?6( E1ports or '()( were D?66,C(@,7@

Inormation abo+t oreign trade between Bangladesh and US ports is available or imports ande1ports

Trade totals are only or the USA ports listed here at Jorld !ort So+rce

Measured by "alue *8US+

9ear Im(orts &'(orts

2/,/ D.,67?,(77,?6( D?66,C(@,7@

2//- D.,?7.,76@,C(6 D.6,@7,?'6

2//. D.,C(),767,?@. D.6(,76),)'C

2// D.,'.?,6)7,)C7 D.7',)C.,?@6

2//; D',676,('C,)C@ D'7,?).,7@7

2//0 D',?7.,7@,C7 D'.6,.?',@(.

2//1 D',(@,?C.,(?C D'.C,7C6,(')

http://www.worldportsource.com/trade/imports/value/BGD.phphttp://www.worldportsource.com/trade/exports/value/BGD.phphttp://www.worldportsource.com/trade/imports/value/BGD.phphttp://www.worldportsource.com/trade/exports/value/BGD.php


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2//7 D),@@@,6@,?.@ D)@,@?,((

Measured by weight *6g+

9ear Im(orts &'(orts

2/,/ ?7,7'?,(?@ ?)(,')6,C6@

2//- .@C,C(),')( ..',@76,.?C

2//. .66,6@',)'7 .,)@C,??7

2// .7@,76C,??6 ?',)C.,??6

2//; .77,'(6,.)C .)?,))C,@(@

2//0 ?.6,))),'(? '.7,?7?,.7?

2//1 .(',7C@,?@6 '?C,6(7,C(?

2//7 '?6,))@,(7 '.),@'.,7)@


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/omplete import and e1port trade data is available rom the9oreign Trade 5ivision o the US /ens+s B+rea+ and USA Trade :nline

2/,7 : U#S# trade in goods with Bangladesh

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally

adjusted unless otherwise speified. !etails may not e"ual totals due to rounding.

Month &'(orts Im(orts Balance

an+ary '(). .)( ?6C( *??(

9ebr+ary '(). 7@ ?7.? *.6

"arch '(). )C ?CC6 *.6?.

T4TA! 2/,7 ,;-#1 ,


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Month &'(orts Im(orts Balance

an+ary '()' .C6 ?@.' *??7.

9ebr+ary '()' .C( ??) *?(

"arch '()' ?)@ ???' *?('?

April '()' ?). ?.@. *.67(

"ay '()' .? ?(@. *.?C(

+ne '()' C7C .@.' *.'C7

+ly '()' .7. ??' *?'7(

A+g+st '()' C'( ??6. *.67.

September '()' .C( .@C *.C(

:ctober '()' .'' .?@C *.).

2ovember '()' '@C ..6 *..C?

5ecember '()' ?') .(CC *'.?

T4TA! 2/,2 0/,#- 1


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+ly '()) 76 ?).. *.?C?

A+g+st '()) C? C(?7 *?C()

September '()) ?66 .7.@ *.'.6

:ctober '()) '((7 .77 *)7(

2ovember '()) )6(6 ..67 *)?@7

5ecember '()) ?77 '6)@ *'??)

T4TA! 2/,, ,


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S4%A< )A=A< TI%A< TIC%A and US$Bangladesh relations

The Jashington*5ha#a bilateral relationship has always been treated li#e that o a8yo+nger brother8s wie and the h+sband8s elder brother8 in Bangladesh They might li#e or

hate each other b+t it is not m+ch disc+ssed in p+blic

The USA did not play a palatable role d+ring o+r war o liberationG rather, they actedagainst +s, siding with the !a#istan occ+pation orces et the US has emerged as o+r biggest trade partner Bangladesh8s ann+al e1ports to the US crossed USD C( billion ando+r ann+al imports rom them is almost USD 7(( million, telling +s o+r e1port bas#et isheavily biased towards their mar#et Jith the emergence o an almost +nipolar world inwhich the USA is one o the #ey c+stodians and champions o democracy and democraticval+es, their political importance has also been increasingly accepted This has becomemore importantG decisions in other big economies4co+ntries li#e those o apan, /hina,India, Bra0il, the United Kingdom and 9rance, are also being inl+enced by them to a

great e1tent Even in Bangladesh, we have seen the envoys o India and reat Britain ando+r meant*to*be third voice, 8the civil society8 -+e+ing +p +nder their leadership d+ring all political transitions incl+ding the m+ch*tal#ed abo+t )4)) government

Interestingly tho+gh, while some o the let leaning organi0ations and ew 8thin#*tan#s8have always been critical abo+t the USA8s role in the co+ntries li#e Bangladesh, one bigthing abo+t the US diplomacy is that they always #ept cool, being oc+sed more ondemocracy, global peace and sec+rity iss+es This scribe8s international b+siness teacherat $enley B+siness School, while tal#ing abo+t rise o /hina and India, especially8/hindia syndrome8, did tell +s, how things are increasingly becoming only b+sinessinterest*driven or India and /hina, whereas it is not the case with the USA or evenBritain They never lose sight o the development and social iss+es, even to theirminim+m possible e1tent

$aving said so, we have always seen o+r policy*planners or decision*ma#ersdownplaying the iss+es li#e S:9A ;Stat+s o orces agreement


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co+ld not have received C(( tho+sand metric tonnes o ood d+ring that critical time

In the same way, there have been m+ch tal#s abo+t the signing o the Trade andInvestment 9ramewor# Agreement ;TI9A


18/23

o+r national interest or political developments within the co+ntry, ma#ing the governmentshy o signing anything li#e 8TI/9A8 at this point in time Rather gossips are telling +sthat Bangladesh is li#ely to sign a broad*based ramewor# agreement, mostly oc+sing onregional cooperation, ighting terrorism and disaster management d+ring the visit o theUS Secretary o State, $illary /linton, to 5ha#a, in order to pave the way or signing a

more ine*t+ned trade and investment agreement in the +t+re

This is both good and bad It is good or the reason that a co+ntry li#e Bangladesh withits s+b*optimal literacy rate, its 8never can get +nited on handling ma3or iss+es8 or Wreachagreement on the way o+t8 sit+ation, and with a government with 8winner ta#es it all8 practices, sho+ld go slow and do their home wor# irst beore signing anything ma3orwith a co+ntry li#e 8h+sband8s big brother8 It is bad, beca+se a co+ntry ** and also amar#et named ** "yanmar ** is rising ne1t to +s, getting prepared to gobble +p all possible help and s+pport rom the USA 2ot +nli#ely, we may see "yanmar signing asimilar agreement earlier than +s Jhile it is better to #now the broader deinition o8terrorism8 or a 8terrorist8 to ma#e s+re that political opposition is not being +nnecessarily

p+t on the doc# with an allegation o 8terrorism8, we do not also want Bangladesh to 8allo+t8 rom any possible s+pport rom a large and inl+ential partner li#e the USA in orderto ens+re more US investment in Bangladesh and most importantly d+ty*ree access o8made*in*Bangladesh8 goods to the USA

There co+ld be 8win win8 or both the parties 9or the USA, it is or being more closelyinvolved in the development process o a liberal "+slim co+ntry, which has become a better brand or s+ccess+l 8blending o democracy and religion8 and to be able to e1portsome o its8 best practices to other similar co+ntriesG or Bangladesh, it is or more e1portgains, more employment opport+nities and more ootprint in the global mar#ets, withincreasing investment on domestic capacity b+ilding along with improved governanceand political tolerance

trade > Commerce

The US Trade /enter ;UST/tcom to b+y additional rightshttp=44blogstcom4beyond*brics4'().4()4'64bangladesh*aces*+s*trade*sanctions*threat*ater*deadly*actory*ire4Xi100'S&VJia

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Bangladesh faces US trade sanctions threat after deadly factory fire

The deadly ire at a clothing actory in the Bangladeshi capital 5ha#a in 2ovember, inwhich ))7 wor#ers died, co+ld have conse-+ences or the co+ntry%s e1ports as well as orits tarnished rep+tation as a man+act+ring power

Bangladesh is str+ggling to avert a threatened withdrawal o US trade privileges P +nderthe generali0ed system o preerences ;S!< P ollowing a campaign by the A9F*/I:,the US trade +nion ederation

There is perhaps one thing in Bangladesh%s avor Unli#e some o the local entreprene+rswho ma#e clothing or e1port in +nsae actories P and +nli#e some o the internationalcompanies that so+rce their prod+cts rom these actories P the government isrereshingly honest abo+t its own shortcomings

“Je co+ldn%t do o+r 3ob properly That is o+r ail+re,” h+lam "+hammed Yader,

Bangladeshi minister o commerce, said on T+esday d+ring a visit to India, lamenting the poor monitoring o actory saety by the a+thorities “The ind+stry went beyond o+re1pectations and beyond o+r capability

“The te1tile ind+stry grew +p all o a s+dden, at a very high pace,” he said “The n+mbero actories now is almost C,((( or maybe more” $e apologi0ed or recent accidents andthe loss o lie and added= “Je are also concerned abo+t the American reaction, and theE+ropeans”

I the US does withdraw S! privileges when it ma#es a decision e1pected in "arch, theimmediate inancial impact on Bangladesh wo+ld be small beca+se clothing, by ar the

co+ntry%s biggest e1port to the US, does not all +nder S! anyway

B+t a US move to p+nish Bangladesh wo+ld +ndermine 5ha#a%s attempts to diversiy itse1ports away rom te1tiles and damage its rep+tation “That will hamper o+r imageo+tside the co+ntry and that%s what we are really concerned abo+t,” Yader said

In the words o A#ram+l Yader, Bangladesh ambassador to the US, on the embassywebsite=

Bangladesh cares very deeply abo+t retaining S! beneit beca+se o the ollowingreasons= a< Bangladesh%s e1tremely narrow and ragile e1port bas#et, b< lin# between

trade perormance and h+man development and social stability, and most importantly, c


20/23

partic+lar item, Bangladesh remains e1tremely serio+s abo+t adding new items in itse1port bas#et $ere lies the signiicance o the US*S!

In the view o Bangladeshi oicials, there is inevitably a trade*o to be made betweenthe +rgent need or 3obs and poverty red+ction on the one hand, and the imposition o

western*style actory standards on the other

“I thin# the American government will event+ally realise the right o wor#ers to wor# isa basic right, a s+rvival right,” said commerce minister Yader It was impossible, he said,or Bangladesh rapidly to reach international standards in man+act+ring, 3+st in otheraspects o daily lie “The water we drin#, yo+ westerners cannot drin# that water,” hesaid “The ood we eat, yo+ cannot eat”

B+t he said all actories were being inspected and “we will close them” i they do nothave eno+gh ireighting and other saety e-+ipment P altho+gh he also admitted thatthere were not eno+gh saety inspectors

5UT*9REE A//ESS A25 T$E TI/9A /:"!FEZ

The garments ind+stry has seen a n+mber o warning signs this year 9rom large*scaleactory*clos+res to the controversial death o a wor#ers% leader in Tangail, it won%t be ane1aggeration to state that the ind+stry, today, is loating on dangero+s waters

To ma#e matters worse, a petition iled by the American 9ederation o labor and/ongress o Ind+strial :rgani0ations ;A9F*/I:< to the United States Trade

Representative ;USTR


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The US ambassador%s recent statement to 5ha#a indicated two things= irstly, the provision o a S! beneit or garment prod+cts is a deal that is still many light yearsaway The Ambassador was #eener on signing a Trade and Investment /o*operation9ramewor# and Agreement ;TI/9A< with Bangladesh Secondly, the ambassador re*iterated the need to improve labo+r standards o the co+ntry The latter has always been

an important scale to rate the growth o the apparel actories in Bangladesh andconsidering the re-+ent riots in the ind+strial areas, the ambassador%s concerns were nos+rprise

The US has constantly p+t press+re to improve the labo+r standards o the co+ntry andcreate trade +nions, as per the USTR%s policies /ertain analysts believe that animprovement in the labo+r standards can provide Bangladeshi apparels with d+ty*reeaccess In reality, however, the labo+r scenario in the co+ntry is ar rom meeting theUSTR%s e1pectations

“It%s diic+lt to say as to what we have to do or the USA to give +s d+ty*ree access

es, they want o+r labo+r standards to improve and ens+re labo+r rights Je are also orit B+t we need time or development The sit+ation here is not the same as America Jeare developing day by day The labo+r standard is m+ch better than beore There aremany bindings and shortcomings America%s ob3ectives sho+ld be #ept in o+r minds sincethey are one o o+r ma3or targets I personally believe that we are on the right trac# withrespect to labo+r standards B+t we need to develop at a aster rate,” claims "5 9a0l+l$a-+e, ormer !resident, Bangladesh Knitwear "an+act+rers and E1portersAssociation

In a similar vein, "+rshedy says, “There%s a h+ge dierence between the labo+rstandards o today as compared to the @(s and 6(s There%s always a threat or trade

+nions to get politicised [ It%ll ta#e more time, b+t the process has already started, rightrom ed+cating the wor#ers abo+t their rights and responsibility and initiating Obetterwor# programmes% etc”

Jith respect to the signing o the TI/9A, members o the garment ind+stry stated that itwas a political matter and sho+ld be decided between the governments o the twoco+ntries The ambassador stated that signing the TI/9A co+ld perhaps be the irst steptowards a d+ty*ree pathway or the apparel actories $e s+ggested that Bangladeshlobby the US congress, which decides the access to d+ty*ree mar#ets, a tas# thatBangladesh has been carrying on or years, b+t to no avail

TI/9A has branched rom the Trade and Investment 9ramewor# Agreement ;TI9A< adeal that collapsed in '((@ ollowing seven years o negotiations There were many points that Bangladesh opposed d+ring the negotiations and one o the main debates wasregarding the Intellect+al !roperty Rights ;I!R


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certain prod+cts The TI/9A aims to improve the bilateral relations between the twoco+ntries

Signing a deal o s+ch a high degree can have great ramiications 9arhad "a0har, notedsocial activists and economist, e1plains, “Je have a m+ltilateral trade agreement in

JT: 5espite the criticism against JT: and its vario+s limitations, the instit+tion may provide disp+te resol+tions i conlict o interest arises Jhile US with other richco+ntries have in principle and practice made JT: ineective , it is literally p+tting press+re on the government to enter into bilateral relations since we are an F5/ we haveadvantages and privileges rom the JT: and there are scope or negotiations which wemight not get thro+gh bilateral negotiations that%s why I thin# we sho+ldn%t stri#e any bilateral trade and investment deal”

Stating an e1ample o the disadvantages o bilateral deals, "a0har says, “In the previo+sScience and Technology agreement the I!R was pressed against +s which was not onlyagainst o+r interest b+t over and above o+r obligations in JT: S+ch agreement is

detrimental to o+r interest 2evertheless, given the enhanced geo*strategic importance oBangladesh to USA beca+se o its shit to Asia region, USA sho+ld provide ree access oBangladesh prod+cts to USA mar#et, partic+larly o garments Bangladesh m+st stoprepressive meas+res and allow trade +nion rights or the wor#ers Je need to deal withUSA in terms o tangible m+t+al beneits

Jith so many sections in the agreement, it%s -+ite clear that a well*inormed decisionneeds to be ta#en in this regard 9ort+nately or Bangladesh, or once, the ball is in herco+rt As o now, it seems highly +nli#ely or companies in the United States to dependon any other co+ntry or their garments demand Also, the location o Bangladesh,according to analysts, holds val+e or the US, in terms o their presence in Asia Th+s,

concerned oicials sho+ld loo# orward to translating the geo*strategic importance oBangladesh into economic beneits in the near +t+re

Conclusion

Bangladesh is an impediment or oreign investors in a n+mber o areas, partic+larly landac-+isition, disp+te settlement, and, to some e1tent, intellect+al property rights A broadiss+e is the need or Bangladesh to moderni0e a n+mber o its e1isting laws, s+ch as the/ompany Faw, which sho+ld be bro+ght +p to date with global b+siness practicesAnother pressing iss+e is that a n+mber o new laws need to be enacted in order to covermany new b+siness and inancial activities, especially in the ast*changing inancial andtelecomm+nication ieldsAccess to land is regarded by oreign investors as one o the ma3or impediments toestablishing man+act+ring operations in Bangladesh Altho+gh oreign investors areallowed to own land, availability is severely limited, as large +n+sed tracts are+navailable, either owned by state*owned enterprises or the government, or +sed oragric+lt+re

A large share o property in Bangladesh is not properly registered, whichma#es it more diic+lt and costly to transer property to oreign b+yers The propertyregistration process also ta#es an inordinately long time to complete


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3eference

Ahmed, 2, ;'(((

trade relationship between bangladesh and usa

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