Dhaka, Washington yet to agree on 20% of US tariff conditions: BGMEA

Highlights:

• Bangladesh, US agreed on 80% of tariff conditions
• 20% of conditions remain unresolved after Washington DC talks
• BGMEA excluded from talks, gave input only last day
• Bangladesh accepts 40% value addition if tariff drops
• US concerned about Bangladesh's Chinese investment, details undisclosed
• Next round of talks scheduled; inter-ministerial dialogue continues

Bangladesh and the United States have reached an agreement on 80% of the conditions proposed by Washington, while no consensus has been reached on the remaining 20% during the second round of tariff negotiation between the two sides, said BGMEA President Mahmud Hasan Khan Babu.

Mentioning that the government informed them on the progress, he told TBS that on the third and final day of the three-day talks on the imposition of a 35% US tariff on Bangladeshi exports, held on 11 July night in Washington DC, some inputs were taken from Bangladeshi business owners.

He further said the government had not communicated to them any topics on which the two parties have either reached an agreement or have not.

"We were not included in the meeting. Since we were kept in the dark and we have been telling the government about it, we were asked for some input before the meeting last night. We gave input. At the end of the meeting, we were told that the reciprocal tariff rate imposed on Bangladesh will be reduced from 35%," he added.

Babu said they were not part of the meeting and as they have been insisting on the government about it, only some inputs were sought from them on the last day of the negotiations.

When asked about the US condition requiring 40% value addition for Bangladeshi exports, he said, "It's not that woven garments are completely incapable of achieving 40% value addition. We are willing to accept the 40% value addition requirement if the US agrees to lower the reciprocal tariff rate from 35% to 15%."

Asked about the US' concerns regarding the increased Chinese investment in Bangladesh and their condition to reduce imports from China, the BGMEA president said they do not know anything about the conditions given by the US. "The government is unable to share anything about this because it has a non-disclosure agreement."

Former president of the Bangladesh Textile Mills Association (BTMA), A Matin Chowdhury, said they do not know anything about the progress of the ongoing tariff negotiations with the US. "Since we do not know anything, it is not possible to comment on the matter."

Asked whether it is possible to add 40% value sought by the US on woven garments, he told TBS, "If we can increase the price of the clothes by doing good quality washing and treatment, the value addition will increase compared to the price of the fabric. Then it will be possible."

The BTMA former president further said China does not have much investment in the readymade garment and textile sector of Bangladesh. "Even then, it is not clear why the US is concerned about this."

He said woven garment fabrics will have to be imported from China, as many types of fabrics, including synthetic fabrics, are not produced in Bangladesh.

He said if the 40% value addition condition remains in place, businesses will not have any problem in exporting denim and knitwear. "Steps must be taken now to ensure that there is no problem in the woven sector."

Today, the Chief Adviser's Press Wing said on the third and final day of the talks with the US that Bangladesh and Washington have agreed on some more issues, while some matters still remain unresolved. To this end, both sides have decided that inter-ministerial dialogue between Dhaka and Washington will continue. Representatives of the two countries will sit down for talks again, either virtually or physically.

It is expected that the schedule of the next phase of talks will be fixed very soon.

The press wing said that the commerce adviser, secretary and additional secretary, who were in the Bangladesh delegation, will return home today. They will go to Washington again to sit for meetings if necessary.

However, as the second round of talks ended, Commerce Adviser Sheikh Bashir Uddin and Security Adviser Khalilur Rahman are optimistic that a positive position can be reached within the stipulated time.

Earlier, at the end of the first day's meeting on 9 July, the government said that the two sides had agreed on most of the issues in the arguments. The government, however, refrained from commenting on the tariff issue at that time.

Besides, after the second day's meeting, it was said that the two countries had agreed on some more matters.