US trade bodies want GSP reinstatement

The American Apparel and Footwear Association (AAFA) along with 270 other trade bodies has urged the US Congress to reinstate the Generalised System of Preferences (GSP) for the convenience of American traders.

The GSP supports development by eliminating tariffs and opening the US market to qualifying exports from 119 developing countries, said the AAFA.

The congressional authorisation of the GSP expired on December 31, 2020 for all eligible countries.

As a result, American companies have paid at least $1.4 billion in extra taxes while also dealing with Covid-19 impacts, high freight costs, and supply chain disruptions, said the AAFA.

All of these issues have contributed to the highest US inflation rate recorded in 40 years, the platforms said in a letter sent to the Congress members in May this year.

"The past few years have seen continuing disruption to supply chains, most recently the threat of work stoppages at our nation's ports and along our rail lines," said Steve Lamar, president and CEO of the AAFA, in a statement last Wednesday.

Congress should extend the GSP until January 1, 2027 as proposed in the Senate bill, or beyond, said the AAFA.

Representing over 1,000 brands, retailers and manufacturers, the AAFA is the public policy and political voice of the apparel and footwear industry, its management and shareholders and its 3 million US workers.

It contributes over $350 billion in annual US retail sales.

"Reactivation of the GSP is also our demand so that we can negotiate with the US for reinstatement of the status for our country," said Tapan Kanti Ghosh, senior secretary to the commerce secretary.

Bangladesh will again place the demand for reinstatement of the GSP in an upcoming bilateral Trade and Investment Cooperation Forum Agreement meeting to be held in Washington on the first week of December.

Earlier, the US suspended the GSP status for Bangladesh on June 27, 2013 citing poor working conditions and labour rights.

Before the suspension, Bangladesh used to export goods like dry fish, ceramics and tobacco items worth $24 million to the US under the GSP programme.

Ghosh told The Daily Star that he has already raised the GSP revival issue at a meeting with Christopher Wilson, assistant United States Trade Representative for South and Central Asia.

It was during Wilson's visit to Dhaka in August this year to discuss different trade issues between the US and Bangladesh.

The US is the single largest export destination for Bangladesh.

Most importantly, the shipment of goods, especially garments, has continued to grow even amidst the volatility of the Russia-Ukraine war and pandemic which had disrupted global supply chains.

Exports from Bangladesh to the US registered its highest growth of 49.35 per cent year-on-year in the immediate past fiscal year (July-June) of 2021-22 to $10.41 billion, according to data from the state-owned Export Promotion Bureau.

Of it, some 95 per cent comprised apparel items.

The export of local garment items has been increasing every year in spite of duties of 15.62 per cent on an average.

For instance, in fiscal 2021-22, Bangladesh exported garment items worth $9.01 billion, registering a growth of 51.68 per cent year-on-year, said the EPB data.

In fiscal year 2019-20, Bangladesh exported apparel items worth $5.14 billion, the data said.