Bangladesh to sign reciprocal tariff trade deal with US today

Bangladesh is set to sign a reciprocal tariff agreement with the United States today in Washington, aiming to address trade imbalances and secure continued access to the American market for Bangladeshi exports.

Commerce Adviser Sk Bashir Uddin and Secretary Mahbubur Rahman will participate in the signing ceremony virtually from Dhaka, while a delegation led by Khadija Naznin, additional secretary and head of the WTO wing, will represent the country in person at the US capital.

Bashir yesterday said details of the agreement would be disclosed after the signing ceremony.

The commerce adviser has already signed the document in Dhaka, which has been carried to Washington to be exchanged with the signature of US Trade Representative (USTR) Jamieson Greer.

The agreement comes in the context of the US decision to impose reciprocal tariffs on goods from several countries, including Bangladesh, in an effort to reduce its trade deficit. Since August last year, Bangladeshi exports to the US have been subject to a 20% reciprocal tariff.

Bangladesh exports goods worth about $8 billion annually to the US market, while US exports to Bangladesh amount to about $2 billion, resulting in a significant trade gap.

Officials said the agreement would include commitments by Bangladesh to increase imports from the US, particularly wheat, edible oil, fuel and cotton. The government has also decided to purchase 25 aircraft from US manufacturer Boeing as part of broader trade balancing efforts.

Speaking at a press conference at the Secretariat yesterday, the commerce adviser said the decision to procure 25 Boeing aircraft was aimed at maintaining the continuity of Bangladeshi exports to the US market. 

The purchase is expected to cost between Tk30,000 crore and Tk35,000 crore, with payments to be made over 20 years.

He noted that the US had initially proposed the purchase of 47 aircraft, but the government opted for 25 for the time being. The interim administration is finalising the agreement to ease the burden on the next elected government, he added.

The adviser said further details of the reciprocal tariff agreement, including its specific terms and conditions, would be disclosed after the signing ceremony.

Referring to ongoing negotiations on tariff reductions, he said that the US had initially imposed a 37% tariff on Bangladeshi exports, which was brought down to 20% through discussions. Efforts are continuing to reduce tariffs on Bangladesh's main export item – readymade garments – to zero, he added.

Bashir observed that Bangladesh had been the only country whose draft agreement details were previously made public, a development he said had complicated earlier negotiations. 

Had the details not been disclosed, he believed, it might have been possible to secure even lower tariff concessions.