Apparel exports to US markets rise

Buyers opt for low-cost items despite compliance issues

04 April 2014 Kazi Zahidul Hasan

Bangladesh's apparel export to the US market remained stable and continued to go up despite the US decision to revoke Bangladesh's preferential trading status by the North American country.  
Industry insiders said the decision, however, impacts a little on multi-billion dollar ready-made garment (RMG) export to the US market and they hope Washington would consider reviving the facility soon.
The country's garment export to the US rose 7.61 per cent to reach $3.42 billion during July-February period of the current fiscal compared to $3.18 billion during the corresponding period of the previous fiscal, according to the latest figure of Export Promotion Bureau (EPB).
Of the total export value, the EPB data shows, woven garments export to the US market amounted to $2.63 billion and knit garments $792 million during the period under review.       
Being the low-cost manufacturing base, Bangladesh allures for cost-crunching US retailers despite deadly factory incidents and suspension of GSP facility by the US government, said apparel exporters.  
"Our apparel sales continue to rise in the US market as "made in China" becomes more expensive there. The US consumers are not ready to pay more, largely because of increased substitution supply from other apparel manufacturing countries like Bangladesh," Abdus Salam Murshedy, a former president of Bangladesh Garment Manufacturers  
and Exporters Association, told The New Nation yesterday.
He added: The US apparel market is highly competitive and the US retailers and buyers are now opting for low cost suppliers although once China had a large market share in the USA.  Now China is losing market share in the US because of their rising cost of production replacing the low cost countries like Bangladesh, Vietnam and Cambodia, he said.    
Terming the US decision to suspend GSP as 'illogical,' Murshedy said, "We find no 'clear and logical' reason behind the move because factory accidents are taking place in other countries also."    "As the US is the biggest export market for Bangladesh, the measure creates obstacles in flourishing bilateral trade between Dhaka and Washington," he observed.
The former BGMEA leader hopes that the US government would restore the GSP facility to Bangladesh as soon as possible as the government of Bangladesh fulfilled most of the condition of the USTR to improve working conditions and labour rights.
"Suspension of GSP facility will not negatively impact on the country's overall export to the US because 86 per cent of the exports to the US represent garments," said Subhashish Basu, Vice-Chairman of EPB, adding, "Bangladesh's apparels do not get GSP facility in the US market."
Basu said that export volume would not decrease, as items that enjoyed the facility, were capable of competing in the global market.

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