Garment makers seek duty benefit from US

Garment manufacturers yesterday urged the US and Bangladesh to sign a cotton purchase agreement so that they could get duty privileges on export of apparel items to American markets and ship more products.

“We have proposed that the US allow us to export garment items to American markets duty-free if we manufacture the apparel items using the cotton from the US,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Rahman made the comments at a press conference after meeting with US Ambassador to Bangladesh Earl R Miller. The envoy discussed various trade issues with the apparel exporters at the BGMEA office in Dhaka. He, however, did not talk to the press.

If the US agrees to the proposal, local millers will import cotton from the US under a special arrangement for Bangladeshi apparel manufacturers to make garment items from the yarn and fabrics for American customers, Rahman said. He said under the agreement the US can allow the duty benefit on condition that all the garment items would be made from the yarn and fabrics using American cotton.

Two local spinning mills have already proposed that the government allow them to set up mills in the US to produce yarn there and make garment items in Bangladesh. But, the proposals were not approved, Rahman said.

Earlier, US cotton exporters also raised the issue and the BGMEA agreed to the proposal, according to Rahman.

“Now, it is up to the governments of both sides to take the proposal forward.”

Such trading arrangement in garment business had been incorporated in the now-scrapped Trans Pacific Partnership Agreement keeping Vietnam in mind.

Bangladesh does not produce cotton and meets 98 percent of the requirement through imports. Of the imports, 40 percent comes from India and nearly 10 percent from the US.

“If the US agrees to our proposal, we will increase the cotton import from America,” Rahman said.

The US is the single largest export destination of Bangladesh. Local apparel exporters face 15.62 percent duty on the shipment of garment items to the country as the American government does not allow duty-free import of garment items. Bangladesh exports more than $6 billion worth of products every year to the US, of which 95 percent are garment items.

The BGMEA also proposed that the US reinstate the generalised system of preferences which was scrapped for Bangladesh in 2013 over poor labour rights and workplace safety.

Replying to a query, Rahman said nearly 4,000 workers were terminated during the labour unrest centred on wage revision in January, not 11,000 workers as claimed by rights groups.

No worker got back their job as they were paid compensation as per labour law, he said.