US and Bangladesh agree on new trade deal with 19% tariff rate

Bangladesh and the US have reached a trade agreement that provides significant preferential market access for certain US industrial and agricultural goods.

Under the terms of the deal, Bangladesh has agreed to reduce its tariff rate on US imports to 19 percent, with exemptions granted for textiles and garments manufactured using US-produced cotton and man-made fibre. The agreement was announced on Monday by Muhammad Yunus, chief adviser to Bangladesh’s interim government.

The White House stated that Bangladesh will provide preferential market access for US industrial and agricultural goods, including chemicals, medical devices, machinery, motor vehicles and parts, soya products, dairy goods, beef, poultry, tree nuts, and fruit. The agreement also includes provisions for easing non-tariff barriers, such as accepting US vehicle safety and emissions standards, recognising US Food and Drug Administration certifications, and removing import restrictions on remanufactured goods.

The nations have also agreed to recent and upcoming commercial deals, including aircraft procurement worth $3.5 billion and estimated $15 billion in US energy product purchases over 15 years. Bangladesh has pledged to uphold internationally recognised labour rights and strengthen environmental protections.

This agreement follows nine months of negotiations that began in April last year. The South Asian nation had previously secured a reduction in US tariffs on its exports to 20 percent, down from 37 percent initially proposed by Washington. This move is expected to provide relief to Bangladesh’s apparel exporters, who account for over 80 percent of the country’s total export earnings and employ around four million workers.

The agreement sets a tariff rate of 19 percent for Bangladesh, which will allow it to compete with its neighbour India on an equal footing. Both countries produce clothing and footwear for clients in the US, and the reduced tariff rate is expected to benefit Bangladeshi manufacturers.

Source: Al Jazeera