Bangladesh signs trade deal with US, tariff rate cut to 19 percent

Bangladesh and the United States have signed a long-awaited tariff-related trade agreement. Under the Agreement on Reciprocal Trade, ART, the reciprocal tariff on exports will be reduced from 20 percent to 19 percent. In addition, garments made with cotton and synthetic fibres imported from the United States will enjoy zero reciprocal tariffs when exported.

The agreement was signed virtually on Monday, February 9, at the Ministry of Commerce conference room.

Officials at the Ministry of Commerce said the signing took place in Washington at 11am local time, 10pm Bangladesh time. The Agreement on Reciprocal Trade was concluded between Dhaka and Washington to address the reciprocal tariff issue. National Security Adviser Dr Khalilur Rahman, Commerce Adviser Sheikh Bashiruddin and Commerce Secretary Mahbubur Rahman joined the ceremony virtually from Bangladesh.

Initially, Commerce Adviser Sheikh Bashiruddin and Commerce Secretary Mahbubur Rahman were scheduled to travel to the United States for the signing. However, due to the proximity of the national election, both decided not to attend the event in person.

Others present from Bangladesh included Security Adviser Dr Khalilur Rahman, Special Assistant to the Chief Adviser for International Affairs Lutfe Siddiqi, and Commerce Secretary Mahbubur Rahman.

In recent years, high tariff rates on Bangladeshi ready-made garments in the US market had posed a major challenge. At the same time, Washington had long raised concerns over Bangladesh’s tariff structure on imported US cotton and synthetic fibres. Under the new agreement, Bangladesh will be able to export garments made with US cotton and synthetic fibres to the American market with zero-duty benefits.

Experts believe the reduction in reciprocal tariffs and the zero-duty facility for garments made with specific raw materials will significantly enhance the competitiveness of Bangladesh’s apparel sector in the global market.