SOME common compliance issues and lack of proper infrastructure in the RMG sector are attributed to the failure in grabbing enough orders from the US buyers. Besides, the recent undiplomatic utterances of the high-ups in the government and ruling party bosses have further made the situation related to expanding export volumes to the USA more complicated. The country’s export earnings from the US market posted negative growth in the first five months of the current financial year 2014-15, a report of a national English daily said on Wednesday. To improve the situation, business experts suggested the government functionaries to make comments cautiously about the US and maintain a constructive relationship with the country as the US is the major destination of our garment products. But no prudent response has been seen yet on the government part. Though it is obvious that workable solutions for removing dependency on the single source like US for selling RMG output is yet to come forth.
USA is the main destination of Bangladesh’s export. In FY 2008-09, USA secured the top position (26.03pc) in respect of importing commodities from Bangladesh followed by UK (14.58%), Germany (9.64%) and France (6.62%). During the period under report, goods worth $ 4,052.00 million were exported to the USA, which was 26.03 percent of the total export of the country. The principal commodities exported to USA are woven garments and knitwear. Bangladesh is the 4th largest apparel exporter in USA just behind China, Vietnam and Indonesia. Bangladesh’s total apparel export to USA was worth $2.37 billion in 2005, it reached $3.91billion in 2010. USA usually buys about 26 percent of our total apparel export.
However, USA cut off the longtime trade benefits offered to Bangladesh after the Tazreen Fashions Factory fire and Rana Plaza collapse tragedies. Though RMG products are not included in the list of duty-free products in GSP, there was an export fall of about $40 million. Bangladesh exports about $5 billion worth of goods to the USA every year and hence, the suspension from US GSP would account for a fall in export of about 0.8 percent. Primarily, this ‘not so big or insignificant’ consequence of banning GSP gave the ruling class to heave a sigh of relief, but later, some Ministers called for regaining GSP, and started to blame America for banning GSP on political grounds.
We are of the opinion that the policy makers in the government must play a single role while deciding on the dependence on a single source. What they should first do is to assess whether Bangladesh can afford to spare the US market or not. In one capacity, they call for resuming GSP and in other, they make undiplomatic moves against the USA policy makers. Without having other destinations for exporting RMG, this double standard will back fire. We suggest to the government to maintain good diplomatic ties with our major trading partners like the USA.
