Bangladesh is seeking duty relief on garments made using US cotton, promising to import larger amounts of cotton should it be successful in its bid.
The US Ambassador to Bangladesh, Earl Miller, met with the Bangladesh Garment Manufacturers Association (BGMEA) earlier this month in Dhaka.
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Speaking to just-style, a representative for the BGMEA confirmed one of the points of discussion was duty relief on the export of clothing made from US cotton.
Currently, the cotton imported from the US used to manufacture apparel, part of which is exported back to the US, is subject to tariffs of 16% on average.
In 2013, following concerns surrounding workers’ rights and workplace safety, the US pulled the BGMEA’s access to the Generalized System of Preferences (GSP). During the talks, the BGMEA said it was looking to restart negotiations to restore the benefit.
The spokesperson said “considerable progress has happened in the area of workplace safety and workers rights issues after the Rana Plaza incident.”
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By GlobalData“If duty can be waived on the apparel made of US cotton this would boost the demand for US cotton in Bangladesh, make our apparel more competitive in the US market and would also benefit US consumers,” he added.
In addition, BGMEA also stated Bangladeshi investors were considering investment into the US spinning sector, should the government agree to offer duty benefits on ready-made garments made using US cotton.
The US GSP scheme is designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 120 designated beneficiary countries. While the GSP programme excludes most textile and apparel products exported to the US, the designation of a country as eligible for GSP sends a strong message that it is taking steps to improve worker and intellectual property rights.
During 2018, the US Department of Commerce’s Office of Textiles and Apparel (OTEXA) said imports of garment and textiles from Bangladesh grew 4.36% in volume terms to 1.93bn SME or 6.65% in value terms to US$5.4bn.
