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Bangladeshi-made readymade garment (RMG) exports to the United States will receive conditional duty exemption if the apparel is produced using at least 20 per cent American raw materials, the head of the country’s apex trade body of export-oriented apparel manufacturers has said.
“…the executive order on tariffs states that if at least 20 per cent of US raw materials (such as American cotton) are used, this additional 20 per cent tariff will not be applicable to the value of American raw materials,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Mahmud Hasan Khan said on Saturday.
“If we use American raw materials, we will get some additional tariff relief,” he said while addressing a press conference held at the BGMEA complex in Uttara, Dhaka.
About 75 per cent of Bangladesh’s apparel exports to the US are cotton-based, he said, adding that it would encourage US cotton imports by local exporters.
He, however, warned that there is no room for complacency, saying that the latest US executive order clearly states that US trade or security agreement negotiations with some countries are still ongoing, which, if executed, could further reduce the tariffs of these countries.
“So Bangladesh has to continue the negotiations,” he noted.
His remarks came a day after the United States cut tariffs on Bangladeshi exports to 20 per cent from the threatened 35 per cent.
By way of clarification, the BGMEA president said that regarding this tariff for all exporters and entrepreneurs—earlier, Bangladesh used to pay MFN duty at a rate of 16.5 per cent in the United States, and now, due to the additional 20 per cent duty, the total tariff rate stands at 36.5 per cent, which will be applied at different rates for different products.
He said the local garment industry has brought about a massive change in all aspects of safety and socio-environmental issues in the workplace over the past decade.
“Now we need to harness this potential. We need to increase value addition for our own needs, increase investment in backward linkages, invest in new designs and innovations, and diversify markets and products.”
Terming the United States not only Bangladesh’s largest market but also a long-term trading partner, Mr Khan said, “We are determined to strengthen and enhance this partnership, and we hope that the government will be careful about implementing the agreements made with the United States.”
Munni_fe@yahoo.com