Dhaka faces stiff opposition from US textile lobbies, competing countries
Sunday, 25 April 2010
Nazmul Ahsan
About a dozen US textile organisations and another 45 trade associations of South and North American, African and Middle Eastern countries are opposing the move to provide the duty-free access to Bangladesh apparel products to the US market under the proposed New Partnership for Trade Development Act (NPTDA), diplomatic sources said.
A bill to this effect will be placed in the US Congress in August next.
The organisations have recently urged the US Congress to exclude Bangladesh and Cambodia from the beneficiary-list of the bill. They have expressed their concern in writing to the Committee on Ways and Means, sources said.
The countries that are hosting the trade associations have either bilateral Free Trade Area (FTA) agreements with the US or are enjoying preferential trading arrangement with that country, a trade diplomat said.
"The organisations have opposed the move fearing trade diversion from their respective countries to Bangladesh and Cambodia under a possible duty-free arrangement with the US," a high official in the Export Promotion Bureau said.
He said it has become rather complicated for Bangladesh to get the duty-free market access for its readymade garments to the US under the prevailing situation.
Presently, a government delegation, led by Golam Hossain, Acting Commerce Secretary, Ministry of Commerce (MoC), is in the US to pursue the US administration in favour of Bangladesh.
The delegation members is likely to appoint a US lobbyist firm for three to four months as Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) are learnt to have agreed to bear the expenses in this connection, sources said.
The delegation is set to return home in the current week, sources in the MoC said.
The major opposing US textile organisations are-American Fibre Manufacturers Association, National Cotton Council, National Council of Textile Organisation, National Textile Association, United States Industrial Fabrics Institute, Sewen Product and Equipment Suppliers Association, US.
The trade association that are opposing the Bangladesh cause are from countries such as Canada, Mexico, Australia, Bahrain, Israel, Jordan, Singapore, Guatemala, Botswana, Sudan, Ethiopia, Kenya, Madagascar, Tanzania and South Africa.
Sources said, the letter, sent to Ways and Means Committee, cited a statement of BGMEA President, Salam Morshedy, made in 2009 that Bangladesh expected to nearly triple its worldwide exports over the next three years and add 1.4 million apparel jobs, even without any trade preference being granted.
Senator McDermott introduced the bill in the US House of Representatives in November last year to offer greater duty-free facilities to 15 least developed countries (LDCs), including Bangladesh.
The bill proposes for duty-free and quota-free market access for non-AGOA (African Growth and Opportunity Act) LDCs and outlines simplification of existing US-GSP rules of origin.
Earlier, an expert committee commissioned by the government in its report said the NPTDA Bill would help Bangladesh boost its exports to the USA if appropriate measures and careful strategies are undertaken.
The bill proposes application of an adjustment rule for duty-free import of certain categories of apparel articles. Besides, the LDCs concerned will qualify for 10 per cent point increase each year for the purpose of duty-free treatment for fiscal years after 2010.
The report said, the bill once passed would potentially provide Bangladesh significant competitive edge and stimulate foreign direct investment flow into the country and increase domestic investment targeting the US market.
In the past, many of the AGOA beneficiaries, including Sub-Saharan African LDCs, had opposed inclusion of Asia Pacific LDCs such as Bangladesh and Cambodia whenever a review of market access was undertaken.
Imports from Bangladesh by the USA in 2009 were above $4.0 billion, of which 90 per cent were textile items. Only about one per cent of these exports enjoyed duty-free preferential access under the existing US-GSP scheme. The average duty rate for the remaining 99 per cent was 15.2 per cent, sources in the Export Promotion Bureau said.
A high official in the MoC said the ministry is aware of the latest development on move to exclude Bangladesh from the list of eligible countries under the proposed NPTDA.
"We know the developments and are not sitting idle," a top MoC official told the FE.
The Commerce Minister Faruk Khan and Acting Commerce Secretary will visit some other countries soon to have an understanding with the global groups opposing Bangladesh's inclusion, he said.
About a dozen US textile organisations and another 45 trade associations of South and North American, African and Middle Eastern countries are opposing the move to provide the duty-free access to Bangladesh apparel products to the US market under the proposed New Partnership for Trade Development Act (NPTDA), diplomatic sources said.
A bill to this effect will be placed in the US Congress in August next.
The organisations have recently urged the US Congress to exclude Bangladesh and Cambodia from the beneficiary-list of the bill. They have expressed their concern in writing to the Committee on Ways and Means, sources said.
The countries that are hosting the trade associations have either bilateral Free Trade Area (FTA) agreements with the US or are enjoying preferential trading arrangement with that country, a trade diplomat said.
"The organisations have opposed the move fearing trade diversion from their respective countries to Bangladesh and Cambodia under a possible duty-free arrangement with the US," a high official in the Export Promotion Bureau said.
He said it has become rather complicated for Bangladesh to get the duty-free market access for its readymade garments to the US under the prevailing situation.
Presently, a government delegation, led by Golam Hossain, Acting Commerce Secretary, Ministry of Commerce (MoC), is in the US to pursue the US administration in favour of Bangladesh.
The delegation members is likely to appoint a US lobbyist firm for three to four months as Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) are learnt to have agreed to bear the expenses in this connection, sources said.
The delegation is set to return home in the current week, sources in the MoC said.
The major opposing US textile organisations are-American Fibre Manufacturers Association, National Cotton Council, National Council of Textile Organisation, National Textile Association, United States Industrial Fabrics Institute, Sewen Product and Equipment Suppliers Association, US.
The trade association that are opposing the Bangladesh cause are from countries such as Canada, Mexico, Australia, Bahrain, Israel, Jordan, Singapore, Guatemala, Botswana, Sudan, Ethiopia, Kenya, Madagascar, Tanzania and South Africa.
Sources said, the letter, sent to Ways and Means Committee, cited a statement of BGMEA President, Salam Morshedy, made in 2009 that Bangladesh expected to nearly triple its worldwide exports over the next three years and add 1.4 million apparel jobs, even without any trade preference being granted.
Senator McDermott introduced the bill in the US House of Representatives in November last year to offer greater duty-free facilities to 15 least developed countries (LDCs), including Bangladesh.
The bill proposes for duty-free and quota-free market access for non-AGOA (African Growth and Opportunity Act) LDCs and outlines simplification of existing US-GSP rules of origin.
Earlier, an expert committee commissioned by the government in its report said the NPTDA Bill would help Bangladesh boost its exports to the USA if appropriate measures and careful strategies are undertaken.
The bill proposes application of an adjustment rule for duty-free import of certain categories of apparel articles. Besides, the LDCs concerned will qualify for 10 per cent point increase each year for the purpose of duty-free treatment for fiscal years after 2010.
The report said, the bill once passed would potentially provide Bangladesh significant competitive edge and stimulate foreign direct investment flow into the country and increase domestic investment targeting the US market.
In the past, many of the AGOA beneficiaries, including Sub-Saharan African LDCs, had opposed inclusion of Asia Pacific LDCs such as Bangladesh and Cambodia whenever a review of market access was undertaken.
Imports from Bangladesh by the USA in 2009 were above $4.0 billion, of which 90 per cent were textile items. Only about one per cent of these exports enjoyed duty-free preferential access under the existing US-GSP scheme. The average duty rate for the remaining 99 per cent was 15.2 per cent, sources in the Export Promotion Bureau said.
A high official in the MoC said the ministry is aware of the latest development on move to exclude Bangladesh from the list of eligible countries under the proposed NPTDA.
"We know the developments and are not sitting idle," a top MoC official told the FE.
The Commerce Minister Faruk Khan and Acting Commerce Secretary will visit some other countries soon to have an understanding with the global groups opposing Bangladesh's inclusion, he said.