Along with a reduced tariff for most exports, clothes made in the South Asian country with American cotton will get a duty waiver
The United States and Bangladesh have reached a trade agreement that grants lower tariffs for the majority of the South Asian nation’s exports.
Under the agreement, the tariff rate for exports to the US will be 19%, a reduction from the 20% rate established in August, as per reports.
According to a post on X by Muhammad Yunus, the chief adviser of the interim government, Washington has pledged to create a system for specific Bangladeshi textile and apparel items utilizing US cotton and synthetic fiber to enter the US market with zero tariffs.
Neighboring India with the US earlier this month, which provides an 18% rate, but without a similar concession for apparel exports.
Dhaka will grant preferential market access for American industrial and agricultural goods, including US farm and food products, a by the White House states.
It will also eliminate tariffs entirely on poultry, pork, seafood, rice, corn, and cereal grains. Duties on certain US products, such as almonds, will be phased down to zero over a period of five or ten years.
Bangladesh Airlines is set to buy 14 Boeing aircraft, and Dhaka will also acquire an unspecified quantity of military equipment from the United States.
The agreement, finalized just four days before Bangladesh’s national elections, has attracted criticism from various groups, reports indicate.
Bangladesh is the globe’s second-largest apparel exporter, trailing only China. The nation’s garment exports, which are considered a key economic indicator, have seen a decline over the last two years.
The ready-made garments industry is responsible for over 80% of Dhaka’s export revenue. This sector provides jobs for 4 million people and accounts for close to 10% of the country’s GDP.