Kazi Zahidul Hasan :
Bangladesh is likely to see benefit than harm if the new US President Donald Trump drops the Trans-Pacific Partnership (TPP) trade pact which his country signed in February 2016 along with 11 other nations.
The nations are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Local exporters and trade analysts expressed fear that Bangladesh might face uneven competition in the global apparel export trade as the pact offers greater market access to goods and services within the signatory countries.
“The US is likely to pull out of the TTP trade deal as part of President Donald Trump’s protectionist trade policies. If it comes true then it will relieve our fear. It will also help sustain Bangladesh’s apparel export to global market,” Abdus Salam Murshedy, President of the Exporters Association of Bangladesh (EAB), told The New Nation on Sunday.
He mentioned that Vietnam appears to be a key competitor of Bangladesh in global apparel business. The country’s apparel export in the US was set to enhance manifold under the TTP pact jeopardizing Bangladesh’s apparel industry.
At present, Bangladesh garment exports to the USA are subject to 15.62 per cent duty that are paid by the importers there, whereas Vietnam’s RMG exports are subject to only 8.38 per cent import duty.
“If the TTP takes a backseat, it will benefit us by keeping intact our export to the US and other countries,” said Murshedy.
The US is the largest export market for Bangladesh. In the fiscal year, 2015-16, its export to the US stood at $6.22 billion with RMG accounted for 90.42 per cent of the total export.
Bangladesh earned $5.62 billion from RMG exports to the US market during the period.
“Local exporters have to face an uneven and tough competition when the TTP comes to effect. It was set to cut our comparative and competitive advantage to the markets of TTP countries and also pave way to some trade diversion from Bangladesh to Vietnam,” M Faruque Hassan, Senior Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The New Nation yesterday.
He said the US withdraw from the TTP deal which Donald Trump branded earlier a ‘death blow’ for American manufacturing would ease the tension of local exporters who have to rely heavily on the US market.
“It would also help reshape our industries,” he added.
M Faruque Hasan said it is crucial for Bangladesh to reduce the cost of doing business to maintain the country’s competitiveness in international trade.
Besides, the country needs to focus on new markets and apparel products diversification and more value addition with increase of productivity in the factories to cushion against any probable losses in garment exports.
