Sleeping bag exports hit a snag
The growth of the nascent sleeping bags sub-sector is set to face difficulties as the item was taken off the list of duty-free exports to the US in December last year, said industry insiders.
Bangladesh is now paying an average 12 percent duty to export sleeping bags to the US where the country enjoyed a duty-free benefit previously, they added.
The sleeping bag manufacturing industry in Bangladesh is still new. Only three companies make the item and employ more than 12,000 workers, mainly inside the export processing zones in Chittagong.
The sleeping bag makers have shifted to Bangladesh from China, mainly for higher costs of production and a shortage of workers in 2008 and 2009 in the world's second largest economy.
Investors from the US, Korea and China have shifted their production units to Bangladesh to produce the item at competitive prices.
Shahnewaz Karim, manager (shipping) of Chittagong-based Northpole BD Ltd, said the latest US decision would hamper normal growth of the sector.
“We used to receive a lot of orders from the US previously, but not now. This year we received fewer orders from the country than last year,” he said, adding that they are now exporting the item to Canada at zero duty.
Bangladesh has already informed these concerns to the US authorities through the Bangladesh embassy in Washington, Commerce Secretary Ghulam Hussain said.
“But I am not hopeful of regaining the duty facility for sleeping bags export as any renewal depends on reviews by the US government. Nothing can be said until the next review," he said.
Sleeping bags made in Bangladesh were removed from the generalised system of preferences on December 29 in response to a petition by US-based Exxel Outdoors, a sleeping bag-maker.
The US government included sleeping bags under the tariff benefit in September last year, only to be excluded from the list in late December.
The issue first came to the spotlight when Senator Jeff Sessions of Alabama lodged an objection in December 2010, demanding a ban on the duty-free import of sleeping bags.
Sessions argued that sleeping bags should be a subject to tariff, like other textiles, because the item competes with American manufacturers. The US trade programme allows about 4,800 products from 131 countries to be imported duty-free.