Bangladesh to seek lower RMG tariff for US market

Workers give a finishing touch to products at an RMG factory in Dhaka. Bangladesh has already started lobbying the US government through its mission there to reduce the tariff rate for exporting apparel items.Photo: STAR

Bangladesh will push the US government to offer it lower tariff or similar duty benefits like Sri Lanka and Pakistan under World Trade Organisation (WTO) rules, said Mujibur Rahman, chairman of Bangladesh Tariff Commission (BTC).
Although Bangladesh is a least developed country (LDC), it will seek the benefits, as it fears to lose compositeness to developing Sri Lanka and Pakistan as they are already getting privileges from the US for their embattled political situation, he said.
Discussions are running to bring down the tariff rates at five percent for five selected garment items of Sri Lanka and Pakistan within five years. At present, Bangladesh, Sri Lanka and Pakistan are paying 15 percent duty on export of garment products to US market.
Talking to The Daily Star over phone, Rahman said the LDCs are not supposed to pay higher duty for exporting products to the developed countries.
He said Bangladesh has already started lobbying the US government through its mission there to reduce the tariff rate.
Rahman said a high-powered committee on WTO negotiation is taking preparation to table the issue both in the LDCs' mini-ministerial meeting in Tanzania to be held on October 14-16 and WTO Summit in Geneva from November 30-December 2.
Tanzania is the coordinator of LDCs for WTO negotiation.
"Bangladesh will also continue bilateral and multilateral negotiations for gaining duty- and quota-free market access to the US," the BTC chairman said.
BGMEA President Abdus Salam Murshedy said Pakistan is now performing well in exporting some garment products to the US market. The US has also taken some initiatives to give more facilities to Pakistan.
"In end of June 2009 the US House of Representatives passed a symbolic legislation providing duty-free access to apparel made in tribal area in Pakistan. It is to encourage Islamabad military offensive against Taliban and Al-Qaeda," he said, quoting from the PEACE Act 2009 of US.
"So I think Bangladesh will suffer from such benefits offered to Pakistan," the BGMEA boss said.
A senior official of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said the country paid a total of $576 million as duty against its export of nearly $3 billion to US in 2008.
Bangladesh mainly exported woven and knitwear to the market during the year, the BGMEA official said.
He said France, being an advanced economy, also paid the same amount of duty although it (France) exported 15 times higher than that of Bangladesh to the US during the period.
Meanwhile, the Tariff Relief Assistance for Developing Economies (TRADE) Act 2009 was tabled recently before the Committee on Finance of the US government to help some of the poorest countries sustain export and economic growth.
This legislation will provide duty- and quota-free benefits for garments and other products similar to those afforded to beneficiary countries under the Africa Growth and Opportunity Act.
The countries covered by this legislation are the 14 LDCs as defined by the UN and the US State Department, which are not covered by any current US trade preference programme.
The countries are Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Laos, the Maldives, Nepal, Samoa, Solomon Islands, East Timor, Tuvalu, Vanuatu and Yemen. The bill also includes Sri Lanka as an eligible country.