BTMA seeks clarity to operationalise US-Bangladesh zero-tariff textile deal

The Bangladesh Textile Mills Association (BTMA) has sought structured consultations and policy clarifications to operationalise Article 5.3 (Textiles) of the recently signed US-Bangladesh agreement, saying the deal could significantly expand imports of American cotton while boosting apparel exports to the United States.

In a letter to Dr Gary Adams, president and CEO of the National Cotton Council of America, on 18 February, BTMA said the 9 February agreement provides conditional zero reciprocal tariff access for textile and apparel exports to the US, linked to imports of US raw cotton and man-made fibre.

BTMA, which represents 1,873 mills with cumulative investments exceeding $23 billion, said US cotton accounted for around 10% of Bangladesh's total cotton imports in 2025. It sees scope to increase that share four to five times in the near term.

At full capacity, Bangladesh's annual raw cotton requirement would reach about 16 million bales, compared to the current effective demand of roughly 8 million bales, the letter said.

The association argued that the framework would create "mutual benefits", enhancing the competitiveness of Bangladeshi apparel in the US market, strengthening sourcing options for US retailers, and ensuring a "captive and expanding market" for American cotton producers, as eligibility for zero tariffs would require the use of 100% US cotton.

However, BTMA sought clarification on several operational issues.

These include eligibility rules for blended yarns containing synthetic fibres, and treatment of recycled cotton used in denim production, where traceability of recycled content is challenging. It requested consideration of a policy waiver for recycled components.

On the proposed cap mechanism, BTMA suggested that export eligibility be set at five to six times the value of US cotton imports, noting that $1 worth of cotton typically translates into $5-6 in FOB apparel exports.

It also sought clarity on whether the cap would be allocated nationally on a first-come basis or company-wise, linked to actual cotton imports.

For certification, BTMA recommended using the US Cotton Trust Protocol, proposing a temporary transitional waiver while enhanced traceability systems are developed.

The association said it is advising members to prioritise US cotton use and is preparing to establish a dedicated bonded warehouse facility for American cotton.

A BTMA delegation is expected to visit the US soon to engage policymakers and industry stakeholders.