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09th-Jun-2019

Sino-US trade war creates big opportunity for BD

By

Kazi Zahidul Hasan  :
Bangladesh's apparel export to the US market witnessed a significant rise during the first ten months of the current fiscal year (2018-19) thanks to the US-China trade war that has created an opportunity for the local exporters.
The country's garments export to the US grew by 16.43 per cent to US$5.1 billion during July-April period of the current fiscal year as compared to the corresponding period of the previous fiscal, according to an official figure.
Bangladesh is the second largest apparel exporter after China and the south Asian nation earned over US$30 billion from exports of apparel in the last fiscal (2017-18).  
"Bangladesh's apparel exports to the US market has recorded a significant growth during the said period taking the benefit of the ongoing trade war between the US and China," Faisal Samad, Senior Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The New Nation yesterday.
He cited that a heavy tariff on Chinese goods forced the US buyers to shift their orders from China to other low cost manufacturing countries creating a big opportunity for Bangladeshi manufacturers.
"More work orders are expected to shift from China in the days to come ultimately benefiting the Bangladeshi garments sector," said Faisal Samad.  
Replying to a question, he said that no doubt, an opportunity has been created. But, we need to do more in the areas of product diversification and value addition to have a bigger share in the US apparel market.  The US recently raised tariffs to 25 per cent from 10 per cent on US$200 billion worth of Chinese exports, including garment items, marking a sharp escalation in tension between the world's two largest economies.
Bangladesh's apparel products are subjected to pay 15 per cent average duty while entering the American market.  
"The trade war between US and China has caused a shift in global trading system creating an opportunity for some low cost Asian manufacturers like Bangladesh and Vietnam," Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation.
He said that the latest apparel export trend indicates that Bangladesh gains from the ongoing trade war. Even before the trade war, Bangladesh's share in the US garment exports was on the rise due to competitiveness of its products.
Garments shipments make up nearly 85 per cent of Bangladesh's total export.
"Imposition of a higher tariff on Chinese exports has given an opportunity to Bangladesh to pick up its shares in the US market. Local manufacturers must diversify their products to take full advantage of the situation," noted Khondaker Golam Moazzem, a research director of the Center for Policy Dialogue (CPD).  
He believes that Bangladesh's export to the US market will increase further cashing the additional flow of work orders from the US buyers.
Bangladesh fetched $5.60 billion from exports to the US market in 2018, and apparel products alone contributed to US$5.40 billion of the total exports, according to a US official data.