Bangladesh will once again urge the US government to reinstate the generalised system of preferences (GSP) for numerous export products at the upcoming TICFA meeting, according to Commerce Minister Tipu Munshi yesterday.
The GSP, a preferential tariff system which provides tariff reduction on various products, was suspended for Bangladesh following the nation's deadliest industrial accident, the collapse of Rana Plaza in 2013.
The fifth round of the Trade and Investment Cooperation Forum Agreement (TICFA) meeting between the officials of Bangladesh's commerce ministry and the United States Trade Representative (USTR) will be held in Dhaka on Thursday.
Apart from reinstating the GSP, Bangladesh will discuss investment, the removal of trade barriers, easy market access to the US from Bangladesh, increasing bilateral trade, intellectual property rights, cotton issues and the digital economy during the TICFA meeting.
Munshi yesterday sat with Christopher Wilson, assistant USTR for South and Central Asia, for a meeting at his secretariat office in Dhaka.
During the meeting, an American delegation also discussed US investment in areas like agro-based industries, tax holiday benefits for US companies in Bangladesh and bilateral trade issues.
"We expect a positive outcome from the TICFA meeting as we have improved both workplace safety and labour rights in the country as per recommendations of the USTR," Munshi told reporters.
Delegations from both countries will also discuss Bangladesh's graduation from least developed country to developing country by 2024 as the country will lose a number of trade benefits in major export destinations. Therefore, Bangladesh's delegation will inform the meeting on the country's preparedness to face the challenges after the graduation.
After the collapse of Rana Plaza, the USTR suspended Bangladesh's GSP status in June in the same year, citing poor working conditions and a lack of labour rights in the garment sector. Interestingly though, the apparel industry did not enjoy GSP facilities in the US at the time.
The USTR had also outlined 16 conditions to be met by Bangladesh should the country wish to reclaim the GSP status.
Following the Rana Plaza incident, improvements were made in electrical, fire safety and structural issues in factories. Labour laws were also amended to improve worker's rights as per the recommendations.
Progress reports on workplace safety were submitted to the USTR twice. However, the USTR did not reinstate GSP status for Bangladesh as the US government observed that further improvements, especially in labour rights, were required.
Currently, the US government does not provide GSP status to apparel items from any country but the duties imposed differ from nation to nation.
The total value of exports from Bangladesh to the US under the GSP was $34.7 million until it was scrapped. Beneficiaries included sectors such as tobacco, sports equipment, porcelain and plastic products.
The US is Bangladesh's single largest export destination. As a least developed country, 97 per cent of the goods originating from Bangladesh had enjoyed duty-free benefits in the US markets as per the decision taken during the Hong Kong Ministerial Meeting of the World Trade Organization in 2005.
However, the country's main export item, garments, was not included in the 97 per cent package. Garment exports account for 95 per cent of Bangladesh's exports to the US.
As a result, Bangladeshi exporters face 15.62 per cent duty on the export of apparel items to US markets.
In fiscal 2017-18, Bangladesh exported goods worth $5.98 billion to US markets while importing goods worth $1.70 billion, according to data from the commerce ministry.