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Bangladesh's plea for duty-free access for apparel made from US cotton market gains momentum


Bangladesh's appeal for duty-free access to the US market for apparel items made from US cotton has gained momentum as the country seeks to boost bilateral trade and investment.

Bangladesh is the world's second-largest cotton-importing country, with almost 99% of the cotton used in its ready-made garment (RMG) industry being imported, a significant portion of which comes from the US. In 2022, the US exported $2.76bn worth of cotton to Bangladesh, which accounted for 35.7% of the country's total cotton imports. However, the current duty-free treatment only applies to the import of cotton for the RMG industry and not to the finished apparel products.

Moreover, Bangladesh's recent policy reform on mandatory fumigation tests for imported cotton from the US is expected to make trade easier and facilitate smoother cotton imports from the US.

The country exported $32.86bn worth of cotton garments in 2022, which represented 71.89% of its total apparel exports. Nevertheless, US importers had to pay $1.55bn worth of duty to import $9.74bn worth of apparel from Bangladesh in 2022.

The appeal for duty-free access to the US market comes at a time when Bangladesh is positioning itself as a significant supplier of apparel in the world. The RMG industry is the backbone of the country's exports and economic growth, with apparel exports increasing by 8.73% annually in the last ten years. The ongoing trade conflict between the US and China may work in favor of Bangladesh's plea for duty-free access, as US importers seek alternative sourcing options.

Duty-free access to apparel products made of US cotton would not only benefit Bangladesh's RMG industry but also offer new opportunities for US cotton growers and exporters to tap into the country's potential as a significant supplier of apparel in the world market. Therefore, the move would be a win-win for both the countries, facilitating increased bilateral trade and investment.


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