Bangladesh on Monday secured a reduced US tariff rate of 19% as the two countries signed a trade agreement that also granted exemptions for some textiles and garments made with US material.
Bangladesh chief adviser Muhammad Yunus said Washington had “committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US-produced cotton and man-made fibre to receive zero reciprocal tariff in (the) US market.”
A statement issued by the White House on the US-Bangladesh trade deal, formally called United States-Bangladesh Agreement on Reciprocal Trade, said that it provided exporters from both countries “unprecedented access” to each others’ respective markets.
What does the US-Bangladesh trade deal say?
Under the US-Bangladesh trade deal, the US tariffs on Bangladesh will be reduced to 19%, down from the originally set 37% that was previously brought down to 20%.
“In addition, the US committed to establishing a mechanism for certain textile and apparel goods from Bangladesh using US produced cotton and man-made fiber to receive zero reciprocal tariff in US market,” Yunus said in his statement.
The White House said Bangladesh had agreed to provide significant preferential market access for US industrial and agricultural products, including chemicals, medical devices, machinery and motor vehicles and parts, soy products and dairy goods, beef, poultry, tree nuts and fruit.
Bangladesh will also ease non-tariff barriers by accepting US vehicle safety and emissions standards, recognising US Food and Drug Administration certifications and removing import restrictions on remanufactured goods, the White House added.
Further, according to a statement released by the office of the US Trade Representative, Biman Bangladesh will purchase 14 Boeing aircraft, with options for additional purchases. Bangladesh will over the next 15 years ramp up its US commercial deals, including around $3.5 billion in purchases of agricultural products, and an estimated $15 billion in energy product purchases.
“Under President Trump’s leadership, the United States is pursuing a trade policy that delivers real results for American workers and businesses, strengthening our economic and security partnerships abroad,” US Trade Representative Jamieson Greer said in a statement.
Bangladesh’s Adviser for Commerce, Textiles and Jute, and Civil Aviation and Tourism, Sheikh Bashir Uddin accompanied Greer during the signing of the agreement. Also present at the signing were Bangladesh Commerce Secretary Mahbubur Rahman and Assistant US Trade Representative Brendan Lynch.
Bangladesh is the first South Asian country to have completed a trade deal with the US, Greer noted in his statement, calling the move a “meaningful step forward in opening markets”.
Bangladesh’s tariff rate is slightly above the 18% US tariffs that India has secured under an interim agreement. However, a full Bilateral Trade Agreement (BTA) is still in the process of negotiations.