BGMEA president writes to US senator Ted Cruz for duty-free access for US cotton-made apparel
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) called on US Senator Ted Cruz to negotiate with his government to allow duty-free access to Bangladesh's apparel made of US cotton to make trade easier.
Expressing gratitude towards the US government for discussing this issue in the bilateral forums, BGMEA President Faruque Hassan, in a letter to the Texas senator, noted that the initiative will reduce the time and cost of importing cotton from the USA.
Quoting a WTO report, Faruque Hassan noted that Bangladesh is the second largest apparel exporting country in the world with a 6.37% share in global apparel trade and a significant portion of its apparel is made of cotton.
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"In 2022, we exported around $32.86 billion worth of cotton garments, which is 71.89% of our total garments export," he said, adding Bangladesh's apparel export reached $45.71 billion in 2022.
According to the BGMEA president, Bangladesh is the second largest cotton-importing country in the world as 99% of the cotton needed for its export-oriented readymade garment (RMG) industry is met by imports.
He informed the senator about a recent gazette notification, dated 19 February 2023, which eased the rules of mandatory fumigation tests for importing cotton from Western Hemisphere countries or regions including the United States of America.
It has withdrawn the double fumigation condition on US cotton allowing an almost zero duty (1%) import facility.
"Last year, we imported 4,080 million pounds of cotton from the world of which almost 409 million pounds were imported from the USA," he said while adding that the duty-free facility for the cotton imported for export-oriented RMG industry in Bangladesh gives a cost advantage to cotton growers and exporters.
BGMEA President Faruque Hassan further mentioned that USA's apparel import from Bangladesh reached $9.74 billion in 2022, of which 71% or $6.91 billion worth of apparel was made of cotton.
"USA's cotton apparel import from the world in 2022 was worth $47.51 billion of which the share of Bangladesh was 14.54%. It clearly shows that Bangladesh is one of the major suppliers of cotton-made apparel to the country," he added.
BGMEA recently decided to seek negotiation through American lawmakers to obtain duty-free market access to the US market for apparel made from American cotton. The duty-free access to the American market for US cotton-made garments is expected to be mutually beneficial for cotton growers and garment exporters.
With the high inflation faced by the USA, granting duty-free market access would allow consumers to purchase the products at a lower cost as Bangladeshi apparel goods are subject to about 16% duty in the import stage in the USA.
US cotton prices are 5%-7% higher than other cotton prices, but the quality of the cotton justifies its use, Faruque Hassan noted earlier, adding that textile millers using US cotton have a 20% advantage in increasing their efficiency compared to their regular production.
"The use of US cotton allows machines to run up to 1100 RPM (revolutions per minute), which is not possible with other kinds of cotton," he added.
BGMEA also plans to write to the Ministry of Commerce to negotiate with the US government and the US Embassy in Dhaka to convey the apparel exporters' arguments to the government.
