Trade with US: Three cheers for $12b
The bottom line remains that of a titanic $4.5 trillion annual trade of the US with the world, we could only capture a paltry 0.23 per cent market share. It is far less than 1 per cent, with the top three Canada, Mexico, and China holding 14 per cent of the pie each
Bangladesh's total trade with the United States has crossed the $10-billion mark in 2021, a feat that we should celebrate and beat our drums in the run-up for 2022 that is beckoning a 12-billion-dollar milestone! First, let us look at blockbuster ten.
Data from the United States Census Bureau tells us how we made it year by year, billion by billion.
In 2016, it was only $6.82 billion of total trade, meaning export to the US and import from the US combined. With exports mounting higher and higher, the figures rose to $7.16 billion, $8.18 billion and $9.01 billion in three successive years. That says we could hit the 10-billion-dollar jackpot in 2020 had there been no pandemic.
We did quite well though. Braving the deadly disease, we exported $6.07 billion worth of goods lifting the total trade to $7.92 billion. And then came the lucky charm 2021: $2.33 billion in imports plus $8.30 billion in export took us to $10.64 billion in the total trade, an astronomical 34.31 per cent rise, year-on-year.
There is not much of a change in imports from the US over the years, rather it is the steady growth of our export that did the trick. When new Boeings are added to our fleet, import goes up, or else it stays below $2 billion. The traditional biggies are seeds, scrap iron and steel, cotton, natural gas and liquefied natural gas.
The quite fascinating fact is that not only have we maximised our export volume, we also sprinted faster than our rivals. From the 54th goods trading partner of America in 2016, we moved up to the 45th position last year, up eight notches in a span of six years, among 232 nations and territories that the US has trading relations with.
THE ROAD TO $12 BILLION
More good news is brewing! The first quarter of 2022 came out as the best three months ever in history! This is unprecedented, unmatched and extraordinary.
These stunning, never-seen-before numbers demand the never-seen-before attention of all stakeholders. Historic month-to-month data also tells us that year closing figure is never a straight quadruple of any quarter. Rather, 12 months in total generally register a higher volume than a fourfold of the first quarter. Put it simply, we are eying on $12 billion of total trade this year, if not more!
This has been a long uphill climb. Having traded since independence, it took us till 1992 to touch the $1-billion mark and three decades more to turn it double-digit. But indications are loud and clear that we are not going to stop here.
And, at this vantage point, let us give due credit to both sides of the aisle, individuals and associations who sell to America on one side, and the Prime Minister's Office, the Ministry of Commerce, the Ministry of Finance, the Ministry of Foreign Affairs, the Bangladesh Bank, the Export Promotion Bureau, the National Board of Revenue, the Bangladesh Export Processing Zones Authority, the Bangladesh Economic Zones Authority, the Bangladesh Investment Development Authority and all other regulators on the other. Hats off!
THE ANTICLIMAX
The bottom line, however, remains that of a titanic $4.5 trillion annual trade of the US with the world, we could only capture a paltry 0.23 per cent market share. It is far less than 1 per cent, with the top three Canada, Mexico, and China holding 14 per cent of the pie each.
How do we broaden our share then? What can we do differently? What crafts can elevate us to a one-per cent holding? A quick look at our export basket to the US will say it all.
We have exported 67 major kinds of products to the US in the first nine months of the current fiscal year but the poor composition of it is painful.
Articles of apparel knitted or crocheted and not knitted or crocheted sit tight on the top of the table with $6.59 billion worth of export, holding an 86.53 per cent share of our total export.
Footwear, other made-up textile and headgears are the only other export items we have that could cross the $200-million mark. Travel goods, artificial flowers, articles of human hair, furniture, and mattresses are striving to make a mark.
Our export to the US was $7.62 billion as of March, data from the Export Promotion Bureau showed.
The harsh reality is that our excessive dependence on readymade garments is still omnipresent. We are not going to repeat the diversity prescription here as our export to the US is quite diversified already.
Entrepreneurs and government are appeared to be trying everything from pharmaceuticals to ceramic ware, from toys and games to glass and glassware, and from electrical machinery to plastics to feed the target destination.
Why success is hard to come by though is a debate we would spare today. It is an occasion to celebrate the milestones and keep the spirits high for the next nine months.
Just a quick food for thought if we leave here: if some more of our big-name exporters in non-apparel industries had been a little more mindful about the depth of the US market, that could have done wonders. For instance, fish and lobsters. For our fish exporting giants, Europe continues to be the comfort zone. Sadly, the $40-million export to the US is largely consumed by the Bangladeshi diaspora. So, one can call it a pseudo export.
MYTH VS REALITY
The name America generally does not click in people's minds when it comes to inward remittances. It is always the Middle East that we think all the remittance is coming from. But our central bank data shows the US is the second-highest remittance sending country after Saudi Arabia. In the last financial year, it was $5.72 billion and $3.46 billion, respectively.
Surprised? Then, brace yourself for more bumping!
When it comes to foreign direct investment, many would put China first. Many others might name Japan or Korea. The fact of the matter is these countries are our valued partners, but not really the toppers if FDI stock is counted.
The top three investing countries are the US, the UK and the Netherlands.
The cumulative FDI inflow from the US stood at $4.32 billion as of December 2021, out of the $21.58 billion global total. That is one single country has invested one-fifth of the total FDI that came from all around the world.
LAST WORD
America leads in more ways than one then!
In FY2019-20, America reclaimed its position as the top destination for our export with Germany, the UK and Spain as the next three major markets. 2020-21 followed suit. This fiscal year, the US is on a hat-trick as our biggest buyer on earth.
Let us raise our glasses to the champion!
The author is a member of the Pacific Council on International Policy and a former commercial counsellor at the Los Angeles Consulate. He can be reached at amamoon42@gmail.com