BGMEA hiring US lobbyists for retaliatory-tariff removal

Bangladesh's apparel apex body unveils move to hire US lobbyists to leapfrog retaliatory tariffs as business leaders, economists and experts take exception to interim government's handling of the staggering negotiations with the United States.

Addressing a roundtable discussion titled 'US Reciprocal Tariffs: Where is Bangladesh heading to?', organised by vernacular daily Prothom Alo in a Dhaka hotel Sunday, the critics also forewarned that the economy would be hit hard if quick measures could not be taken to head off the oncoming headwinds.

Distinguished fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya criticised the government handling of the issue, euphemistically describing the administration as "innocent, guiltless, and naive" in its approach.

The economist commented: "It feels like we're trying to move forward with an extraordinarily innocent and blameless government. We understand the complexities here, but those in power act as if they don't. That's why I said I've never seen such an innocent and naive government."

He has emphasised that historically, no weak government has successfully negotiated favourable trade terms. "An uncoordinated government rarely seizes major opportunities. This is a government so disjointed that it's unclear who is leading what.

"On top of that, the lack of political legitimacy contributes to its fragility."

The Distinguished Fellow of the policy think-tank further notes that the absence of expert and stakeholder involvement in the negotiations is a serious flaw given the government's current vulnerability.

Likening the current post-uprising administration to the previous one, Dr Bhattacharya said, "I have worked with several governments. Earlier administrations may have lacked knowledge on certain matters, but when informed, they would seek advice and implement suggestions. The current government claims they already know everything and dismisses input."

He stresses that the tariff issue is not merely an economic matter, but one of political economy and geopolitics. "Those who consider this merely a tariff dispute are missing the larger picture."

Dr Bhattacharya also criticizes the lack of discussion around the service sector in negotiations, despite its ties to Bangladesh's major export industries like garments and pharmaceuticals. "None of the advisers or officials involved has even mentioned the service sector," he told the audience.

He also opposes the confidentiality (non-disclosure) agreement signed with the US, saying, "Instead of a secrecy agreement, we should have issued a non-paper stating our position."

Regarding the way forward, he suggests structural reforms and a broader strategic vision. "This issue cannot be resolved through tariffs alone. We need a clear long-term roadmap for Bangladesh's global position. For now, we must prioritise employment and investment in our decision-making."

Veteran businessman and Managing Director of Ha-Meem Group A.K. Azad expressed deep concern over the deteriorating export situation. "In my 40 years in business, I've never seen such a crisis in the export sector," he told the meet.

"We, the business community, have brought this sector to an honourable position, but now we are disappointed and frustrated," Azad added.

Sharing his experience with an international brand partner, he said, "One of our major clients invited me to their head office and said they had tried to assess the position of the Bangladesh government through their own authorities. They concluded that Bangladesh's stance is weak and unlikely to yield favourable results. This was deeply disheartening."

Azad, also a former chief of the country's federative trade body, FBCCI, said when he had contacted several government advisers to express his concern, they took the matter seriously.

"And the following day, the Commerce Adviser held a meeting with exporters. He assured us that 95 per cent of the issues had been resolved and that work was ongoing with various ministries to address the remaining 5.0 per cent."

Highlighting the growing uncertainty among international buyers, Azad said, "One of my buyers sent an email stating that if the additional US tariff is not withdrawn by the 1st of next month, I would have to bear a 35-percent duty. Now the question is-how do I absorb that?"

While the government claims it has begun lobbying efforts in the US, Azad remains skeptical: "We don't know how effective these efforts will be, especially at this stage. Bangladesh is going through a very challenging phase."

President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Mahmud Hasan Khan revealed that the organisation has just begun efforts to hire lobbyists in the US to negotiate the removal of retaliatory tariffs.

"Since yesterday, we've been running around to hire lobbyists," Khan said, "but the response has been poor. Most firms are already tied to other countries."

He admitted that even a few days ago, he was still optimistic. "Those directly involved in negotiations were informally very confident. But two days ago, we began hearing whispers that the United States Trade Representative (USTR) is not the ultimate decision-maker. It is, in fact, the Trump administration that holds the authority. Why did it take us so long to realise this?"

As the clock ticks toward the deadline, Khan regrets that if they had known earlier, they could have begun lobbying efforts a month ago.

"Now, we are facing resistance even within our board. Many members are discouraging us from getting involved at this late stage, fearing the negotiations will fail. Why should we bear the burden of failure?"

He also shared statistics to show the extent of exposure. "Out of BGMEA's 1,322 member-factories exporting to the US, 100 depend on the US for 91-100 per cent of their exports. Another 822 factories export 0-20 per cent to that market."

Highlighting the vulnerability of the sector, he added, "We operate with a profit margin of only 1.2 per cent to 1.5 per cent. Even if the extra tariff is 20 per cent, we might still survive-unless countries like India, Vietnam, and Indonesia face lower retaliatory tariffs than us."

mirmostafiz@yahoo.com