New hope for export growth

After the recent India-EU FTA, Bangladesh has realised that there was a probable vulnerability of its exports in the EU market in the coming years. However, the executed Agreement on Reciprocal Trade (ART) between the USA and Bangladesh appears to be a strategic move to offset any fear in this regard.

Under this agreement, Bangladesh's overall tariff will be reduced from 20 per cent to 19 per cent. Additionally, if Bangladesh imports cotton from the US, the tariff will be zero -an immense opportunity for the country's garments sector to expand further and enhance its competitiveness in the US market.

Through this agreement, approximately 86 per cent of Bangladesh's garment exports will enjoy tariff-free access to the US market, which could significantly strengthen the country's export resilience and diversify its trade advantages beyond the EU. For the future of the national economy, it is obvious that such treaties must be executed keeping Bangladesh's interests in favour of revenue earnings. Other competing countries are vigorously trying to strengthen their positions and enhance their market share, which poses a significant threat to Bangladesh.

Undoubtedly, Bangladesh has played a good role through this treaty for its garment sector. But it is still crucial to maintain a stronger position in the EU market even after LDC graduation. Therefore, the newly elected government should also focus on the EU market. Besides, diversification of export elements is a must. Heavy dependence on garments may further increase the threat in the coming days.

Kawsik Azad Pronoy

A banker