FTA with USA may be beneficial for Bangladesh
After failing to restore the Generalized System of Preferences (GSP)
facility in the US, Bangladesh is currently looking forward to
signing a Free Trade Area (FTA) to deal with the country.
According to a recent study conducted by the Bangladesh Tariff
Commission, an FTA with the United States to trade in goods will
be beneficial for Bangladesh.
RMG products made in Bangladesh currently pays a 15% duty on
average in order to enter the US market. It can be possible to
ensure a duty-free entry for the products by signing an FTA deal
which will be hugely beneficial for Bangladesh. Because
Bangladesh only imports capital machinery from the US whose duty
are comparatively low. So, by signing an FTA, the benefits which
BD will be gaining will be obviously more.
Currently, this FTA process is under a comprehensive study stage
where it is properly being analyzed whether it will be worth it
or not. Once the research is completed, a formal proposal will
be sent to the USA to start negotiations.
It should be noted, Bangladesh failed to restore the GSP
facility for export products in the USA which was suspended in
2013 during the Rana Plaza collapse. After that, various human
rights and safety issues have become the barrier between the
relationship between Bangladesh and the USA.
According to officials, a letter from the Bangladesh Ambassador
in Washington, Mohammad Ziauddin to the commerce ministry
indicated the possibility of an FTA. After that, the tariff
commission researched the advantages and disadvantages of such a
It was found that US energy and power-based companies have
invested about $2.1bn in Bangladesh in 2018. Whereas, Bangladesh
exported goods to the US worth of $6.87bn in 2018-19.
However, Bangladesh Knitwear Manufacturers & Exporters
Association (BKMEA) said that such a deal will unlikely take
place due to political reasons. Although, if such a deal is
made, it will be a safeguard for Bangladesh to prevent any
unethical pressure from the USA.