Special Correspondent :
The US-China trade war has forced American fashion companies to look for alternative supply sources beyond China creating a big opportunity for the Bangladeshi apparel exporters.
Trade tensions between the world’s two biggest economies may have a significant impact on American fashion companies’ sourcing pattern from China, benefiting other Asian countries like Bangladesh and Vietnam, according to an US study.
It says, “US companies plan to increase sourcing of garments from Bangladesh in the next two years amid concerns about escalating US-China trade tensions. This may allow Bangladeshi exporters to grab even a bigger share in the US apparel market.”
The US Fashion Industry Benchmarking Study-2018, conducted jointly by University of Delaware and United States Fashion Industry Association (USFIA), was based on a survey of 28 executives at the leading US fashion companies from April 2018 to May 2018 which incorporates a balanced mix of respondents representing various types of businesses in the US fashion industry.
Responding to the survey, executives of top US fashion companies expressed concern over the protectionist U.S. trade policy agenda saying it would force companies to switch even to more expensive export destinations raising the sourcing cost significantly.
Like 2017, respondents say Bangladesh offers the most competitive price, followed by Vietnam. However, respondents see many Asian countries’ cost competitiveness weakened in 2018 versus a year ago due to rise in the cost of raw materials and workers’ wages.
The study shows that Bangladesh advanced two notches ahead in the list of the top apparel supplier country in the USA to hold fifth position in 2018 from seventh last year.
In 2017, China remains the top supplier for most US fashion companies when their apparel imports from China stood at US$ 27 billion and US$ 5.0 billion from Bangladesh.
China accounts for the highest share of 33.7 per cent of the US apparel import by country in origin (value terms) followed by Vietnam 14.4 per cent and Bangladesh 6.3 per cent during the period.
“Definitely, Bangladesh will take the advantage of the US companies’ sourcing diversification being the world’s most competitive apparel producing country,” former BGMEA President Anwarul Alam Chowdhry Pavez told The New Nation.
In fact, he said, Bangladesh has already gained ground in the US market by supplying high quality garments at competitive price. Big US fashion brands and companies have also laid down their roots in local industry fixing it a reliable sourcing destination.
“Bangladesh’s apparel export to the US market is expected to grow further as a result of US companies’ shift in sourcing pattern from China,” Pavez said.
However, respondents to the US study say sourcing from Bangladesh, Cambodia and India involves higher compliance risks in general. Additionally, respondents express more concerns about the risk of compliance from AGOA (African Growth and Opportunity Act) members this year and the reasons remain unclear.
