RMG exports to US revive
Country’s exports have increased over the years despite the annulment of Trans-Pacific Partnership (TPP) with the United States of America.
Bangladesh’s apparel export to the United States has risen by 2.9 percent year-on-year to the tune of $1.87 billion in the first four months of this year.
At present, Bangladeshi manufacturers have all the reasons to feel cheerful as their exports to the US have been showing an upward trend for the last few months in a long time.
The TPP, a trade agreement linking Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States, was signed on 4 February 2016. It represented about 40 percent of the world economy.
Before the US formally pulled out of the TPP in January last year, many American retailers were placing billions of dollars worth of work orders in Vietnam a major competitor of Bangladesh in the global apparel trade with expectations of enjoying zero-duty benefits under the mega trade deal.
Now, American retailers are slowly switching to Bangladesh, said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“More work orders will continue to come here,” he said.
According to data from the US Office of Textiles and Apparel, in the January-April period of 2018, Bangladesh was the sixth largest garment exporter to the US. Around 90 percent of Bangladeshi garment items are exported to the US--the single largest export destination for Bangladeshi exports.
Remediation work by the foreign inspection agencies Accord and Alliance have also helped Bangladesh’s garment factories obtain the retailers’ fresh support.
“So, our image has brightened up a lot,” Rahman said, adding that the depreciation of the taka against the greenback was another factor going in favour of the garment exporters.
The garment makers now get Tk 84 for every US dollar, which was Tk 80 even a year earlier.
The rising export of value-added garment items was also another reason for the higher receipts in the first four months of 2018.
American retail sales began picking up from December last year, which in turn led to a rise in work orders for local manufacturers, Rahman added.
The failure of other emerging garment-exporting nations like Cambodia and Ethiopia -- apart from Vietnam -- to successfully cater to American retailers has sent the work orders flowing into Bangladesh again, said Kutubuddin Ahmed, chairman of Envoy Group.
This time, the local garment makers have been enjoying the benefit of a shorter lead time as backward linkage integration of the sector has adequately been established, he said.
This factor has also been helping Bangladesh to achieve higher exports, a benefit that the other emerging countries do not have.
Therefore, the 15.62 percent duty that apparel exports from Bangladesh are subjected to upon entry into the US is not working against Bangladesh's favour, he said.
As of April, China sent garment items worth $10.92 billion to the US, which is the highest. It was followed by India ($2.67 billion), Vietnam ($3.99 billion) and Pakistan ($928 million).