Bangladesh’s garment exports to the US may be hit by the Trans-Pacific Partnership (TPP) treaty. TPP led by the US, is a trade agreement between 12 countries.
At present, Bangladesh pays 15.62 per cent duty for its garment exports to the US, whereas Vietnam pays 8.38 per cent. If the TPP is signed, garment exports from a country like Vietnam will enter the American market completely duty-free and Bangladesh will lose its competitiveness in the apparel trade. As of now the US is Bangladesh’s single largest garment export destination.
However, Bangladesh's garment exports to other TPP nations like Canada, Japan, New Zealand, Australia and Chile might not be hampered as it already enjoys zero-duty benefit to those countries.
The TPP is a comprehensive agreement that will open markets, set high-standard trade rules and address 21st-century issues in the global economy. In so doing, it will promote jobs and growth in the US and across the Asia Pacific region. If Bangladesh had been a strong player in raw material exports such as yarn, fabrics and fibers, it would have benefited slightly from the deal. The average tariff of Bangladesh is 55 per cent, which is too high for openness of the country's business. Traders say its tariff structure should be liberalised as some other countries have the opportunity to join the TPP in the near future.