Bangladesh may push for a bilateral free trade deal with the US amid discord between the two countries over Generalized System of Preference (GSP).
Trade officials said, the new engagement has been aimed at intensifying Dhaka-Washington bilateral trade.
“We would push forward a bilateral free trade negotiation with the USA, as the country has taken a rigid stance over restoring GSP facility in favour of local merchandises,” Commerce Secretary Shubhashish Bose told The New Nation on Tuesday.
The US suspended GSP for Bangladesh in June 2013 after two industrial disasters (Tazreen Fashions fire and Rana Plaza building collapse), citing serious shortcomings in labour rights and workplace safety in local garments industry.
Suspension of the GSP facility, however, intensified trade tensions between the two countries.
“In fact, the US government has decided not to restore the GSP scheme for Bangladesh any more and it is their political decision. Bangladesh availed the trade preference under the fundamental WTO rules.
But, the Donald Trump’s administration has taken an extraordinary shift in US trade policy, allowing the country to raise tariffs above ceilings agreed by WTO countries and set different rates for individual nations outside of free trade agreements,” said Shubhashish Bose.
Earlier, Bangladesh mission in Washington in a message to the government convened the US government’s stance over the GSP issue, urging it to initiate fresh trade negotiation with the US for garnering market accessof local products in the American market.
In this context, Bangladesh decided to push for a free trade deal with the US abandoning the GSP issue from its long-term trade negotiation agenda. Even, the country didn’t raise the issue in the just concluded TICFA meeting in Washington.
“The US trade officials at the TICFA meet hinted for granting special trade preferences to Bangladeshi export items under a new framework arrangement, commonly known as free trade agreement (FTA),” said Shubhashish Bose, who led an 12-member Bangladesh delegation in the fourth round of TICFA council meeting between Dhaka and Washington last week.
He said that Bangladesh’s export to the US market would rise significantly if Dhaka signed an FTA with the Washington.
The US is the single largest export market for Bangladesh where it exported goods worth $6.0 billion in the just concluded fiscal year (2017-18) and ready-made garments covered 90 per cent of the total export goods, which are paying the highest tax among the exporting nations while entering into the US market.
The cumulative US investment in Bangladesh reached US$ 3.3 billion in 2017, according to an official figure.
Commerce Secretary Shubhashish Bose said that Bangladesh was going to upgrade from the least developed country to a developing one and it would also make Bangladesh ineligible for GSP in the US market. So, the FTA is the best option for Bangladesh to achieve a long-term economic gain through capitalizing a better bilateral economic relation with the USA.
