Refayet Ullah Mirdha:
Leading retailers and brands in the US want their government to reduce import tariff on apparel and fashion accessories, according to a recent survey by US Fashion Industry Association.
The survey was conducted among 29 retailers and brands of which 85 percent called for abandoning rules of origin meant for apparel items.
If the US government cuts import tariff on apparel and fashion accessories, Bangladesh will be benefitted as the country now pays a huge amount of customs duty to the US.
“Respondents report very low utilisation rates of current FTAs (free trade agreements) and preference programmes, suggesting that current rules do not work for the industry,” the survey report said.
Bangladesh has long been negotiating with the US for duty-free access of its garment items. But the US says the negotiations for the duty benefit should be on a multilateral platform under the purview of World Trade Organisation and US Congress.
“We will not appoint any lobbyist for getting the duty benefit, as we are trying under the provisions of the WTO,” said Hedayetullah Al Mamoon, senior secretary to the commerce ministry.
Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, said: “We had earlier appointed a lobbyist for the purpose but that did not bring any result.”
“If the US honours the WTO provisions, Bangladesh will easily get the duty-free access of its garment items.”
Currently garment makers have to pay 15.61 percent duty on their exports to the US, although Bangladesh was supposed to enjoy zero-duty benefit being a least developed country.
Around $828 million was paid to the US customs last year and $3.41 billion over the last five years, commerce ministry data shows.
According to the declaration of the fifth WTO ministerial conference in Hong Kong in 2005, the US offered duty-free access for 97 percent products originated from Bangladesh.
But Bangladesh’s main export item — garments — is not among these 97 percent products.
Also, the US last year scrapped the generalised system of preferences for some selected Bangladeshi products, citing serious shortcomings in workplace safety and labour rights.
Garment exports to the US rose 3 percent year-on-year to $5.15 billion in fiscal 2013-14.
The US imported $80.78 billion worth of apparel items in fiscal 2014, a rise by around 3 percent year-on-year.
Bangladesh is the third largest apparel supplier to the US, with a 6.06 percent share in its market, after China’s 36.81 percent and Vietnam’s 10.83 percent, according to the US Department of Commerce.