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Bangladesh’s apparel exports to the US down 1.96 per cent

Bangladesh’s apparel exports to the US, its single largest destination, have declined 1.96 per cent year-on-year. The country’s garment exports to the UK, the third largest destination for the Asian country, declined 5.19 per cent year-on-year in the July-December period of the current fiscal year.

There is a change in the attitude of US consumers, who now prefer spending more on electronic gadgets compared to clothes. The US election has also impacted retail sales negatively. Global apparel exports to the US declined 6.44 per cent year-on-year in 2016. Garment items account for 95 per cent of the goods exported from Bangladesh to the US market.

All nine out of ten top apparel exporting nations of the world experienced negative growth in shipment to the US in 2016. Only Vietnam's apparel exports increased 0.30 per cent year-on-year in 2016. Moreover, Bangladesh now faces an export duty of 15.62 per cent under America's most favored nations' category.

But apparel exports from Vietnam to the US may face stricter rules as the US has abandoned the Trans-Pacific Partnership. Vietnam—one of the major competitors of Bangladesh in the US market—was supposed to enjoy a zero duty benefit as one of the member nations of TPP. After the scrapping of the TPP, the export duty of 8.38 per cent for Vietnam will remain in force. This may ultimately benefit Bangladesh.

Meanwhile Bangladesh’s garment shipments to the UK to declined and exports may be further hit as British consumers are facing rising inflation and weakness of the pound. The UK is Bangladesh's third largest export destination. Bangladesh has been enjoying zero-duty benefit to the UK under the EU’s Everything but Arms scheme since 1971. But the duty privilege might not continue once Britain leaves the EU trade bloc. If Bangladesh cannot sign a bilateral trade deal with the UK for the continuation of zero duty benefit, its exports to the British markets will fall further.

Bangladeshi exporters are getting a lot of work orders from British retailers, but they are offering lower prices. Small and medium-sized exporters have come under pressure as they cannot sell their products at the reduced prices and production costs have gone up.

Britain's largest clothing retailer Next is a major importer from Bangladesh, but it has slashed work order volumes. The retailer had planned to buy apparel items worth $260 million from Bangladesh in 2016 but took garment items of about $180 million.