US continues to be key export market for Bangladeshi apparels

America will continue to be a major export destination for apparel items made in Bangladesh as Washington is working with Dhaka to improve the condition at the factories in the country, said a senior official of the US. 

The US has been the single-largest export destination for Bangladesh for decades.

Its standing has been maintained despite higher inflationary pressure on consumers stemming from the escalated commodity prices amid the Russia-Ukraine war and the fallout of Covid-19.

The overall export from Bangladesh to the US grew at 49.35 per cent to $10.41 billion in the immediate past fiscal year of 2021-22, the highest pace of growth, data from the Export Promotion Bureau showed. The receipts stood at $6.97 billion in 2020-21.

Garment shipment raked in $9.01 billion in the last fiscal year, clocking 51.68 per cent year-on-year growth compared to $5.94 billion a year earlier.

"We are working very closely with the government of Bangladesh to address a number of issues that we have identified as well as a number of trading partners in Bangladesh to strengthen the labour rights," said Arun Venkataraman, assistant secretary of commerce for global markets and director-general of the US and Foreign Commercial Service in Dhaka last week.

He was in Dhaka to open the new US commercial service centre in the capital.

The US is working with the government, the International Labour Organisation, and the European Union to improve the labour condition and rights in Bangladesh.

"I think we can look to support Bangladesh as one of the most competitive producers of garment in the US market," Venkataraman said when asked whether America will offer duty-free export opportunities for locally made apparel items to the US markets.

"We recognise and appreciate the strong role of the garment sector in Bangladesh."

Currently, the US does not provide duty-free market access, known as the Generalised System of Preferences (GSP), to any country. The tenure of the latest GSP programme came to an end in 2020 and the US Congress has not revived it since.

The US suspended the GSP facility for Bangladesh in 2013 citing poor labour rights and poor workplace safety following two industrial disasters -- the Tazreen Fashions fire and the collapse of the Rana Plaza building.

Venkataraman said American companies are incredibly excited to invest in the energy sector.

"They are really going beyond the traditional energy to a new form of energy, renewal energy, other sustainable elements of energy, and green technology for investment in Bangladesh."

According to him, US companies see Bangladesh as a major market as the country is moving up the development ladder and millions of people are moving out of the poverty line and joining the middle class.

"Every sector is open for growth."

American entrepreneurs are keen to invest in healthcare, the digital economy, technology, infrastructure, dredging, and the expansion of the Dhaka airport.

The senior official points out that American investors want a stable and predictable regulatory environment that is shaped by the rule of law and transparency.

"They are looking for ways in which they can support the use of digital tools and they are looking for digital policies aligned with international best practices."

Venkataraman cited another strong point of Bangladesh, which is its vast pool of skilled workforce, which pulls investors.

"Bangladesh is very fortunate to have a large youthful workforce that can be a demographic dividend if used properly."

He informed that the US would continue to work with Bangladesh on the proposal to develop a business model as local apparel exporters have sought duty benefits on the shipment of garment items manufactured using American cotton.

A few years ago, the Bangladesh Garment Manufacturers and Exporters Association proposed the US offer preferential market access to garment items made from the key textile raw material imported from the world's biggest economy.

During the conversation, Venkataraman lauded the country's astonishing development success and the graduation to a developing nation from the grouping of the least-developed countries.