Bangladesh’s garment exports to the US will not be affected by the proposed Trans-Pacific Partnership.The reason is that Bangladesh is performing well now even after paying a higher duty than Vietnam to the American market.

TPP is a mega trade deal involving the US and 11 other Pacific Rim nations including Vietnam, Bangladesh’s main competitor in the apparel trade.

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, Vietnam’s garment items will enjoy duty-free access to the US market.

Vietnam is performing well in the US market due to preferential tariff rates it gets on its export of garment items. Currently Bangladesh is the sixth largest garment exporter to the US market and Vietnam is the third largest. Garment and textile exports to the US from Vietnam increased 12.64 per cent year-on-year between January and April. Bangladesh’s exports grew 7.24 per cent in that time.

But Vietnam will receive a lot of foreign investment if the TPP is signed as the US and the other signatories of the deal are richer and are interested to expand their operations beyond their national borders. To counter that Bangladesh should also allow foreign direct investment in the garment sector.