According to a joint statement released by the White House on Monday, February 9th, the United States will decrease its tariff on Bangladesh to 19% as part of a reciprocal trade agreement. Additionally, the U.S. will grant tariff exemptions to some textile and clothing products manufactured in Bangladesh using American raw materials. In return, Bangladesh will ease non-trade barriers for the United States.
The joint statement issued by the White House outlines Bangladesh’s commitment to provide significant market access for U.S. industrial and agricultural products. This includes chemicals, medical devices, machinery, vehicles and their parts, information and communication technology (ICT) equipment, energy products, soy products, dairy, beef, poultry, as well as nuts and fruits.
The statement also mentions that the U.S. will provide partial products with zero tariff treatment in Bangladesh.
Muhammad Yunus, Chief Advisor of the interim government of Bangladesh, stated that the U.S. has committed to establishing a mechanism for certain textile and clothing products produced in Bangladesh using American cotton and synthetic fibers to enjoy zero tariff treatment in the U.S. market.
Yunus noted that the agreement was reached after nine months of negotiations between the two countries that began in April last year.
The garment industry is a key sector of Bangladesh’s economy, accounting for over 80% of total export revenue, employing approximately 4 million workers, and contributing about 10% to the country’s GDP. The U.S. is one of the largest markets for Bangladesh’s garment industry.
The joint statement mentioned that Bangladesh will also relax non-tariff barriers for the U.S., including accepting U.S. vehicles that meet federal vehicle safety and emission standards, recognizing certifications from the U.S. Food and Drug Administration (FDA), and lifting import restrictions on re-manufactured products.
“This agreement will provide unprecedented opportunities for exporters from the U.S. and Bangladesh to access each other’s markets,” the joint statement said.
It also highlighted recent and upcoming commercial agreements between the two countries, including aircraft purchases, a $3.5 billion procurement of U.S. agricultural products such as wheat, soybeans, cotton, and corn, and a $15 billion energy product procurement over the next 15 years.
Bangladesh has pledged to protect internationally recognized workers’ rights and to adopt and maintain high levels of environmental protection.
In August last year, Bangladesh successfully lobbied for the U.S. to reduce its tariff on the country from the initially proposed 37% to 20%, providing much-needed assistance to the country’s garment exporters.