New Delhi: The recent trade agreement between the United States and Bangladesh, signed on February 9, has reduced tariffs on Bangladeshi exports but also introduced major economic commitments that could reshape Bangladesh’s trade policy and long-term economic strategy.
While the deal offers limited tariff relief, analysts say the conditions attached to the agreement may carry significant costs.
Tariff relief — but still high duties
Under the agreement, the United States reduced the reciprocal tariff on Bangladeshi exports to 19 percent.
However, this does not eliminate existing duties. When combined with the most-favoured-nation (MFN) tariff of about 16.5 percent, the total tax on some Bangladeshi garments entering the US market can reach around 35.5 percent.
The deal does provide duty-free access for selected garments made using US cotton and synthetic fibres, which is important because Bangladesh’s ready-made garment sector contributes about 10 percent of GDP and employs roughly 4 million workers.
But the tariff reduction itself is relatively small compared with the broader commitments made by Bangladesh.
Major purchase commitments
As part of the agreement, Bangladesh has committed to large-scale imports of US goods, including:
USD 3.5 billion worth of agricultural products
UD 15 billion worth of energy products over 15 years
purchase of 14 Boeing aircraft
expanded access for US industrial and agricultural products in Bangladesh
Bangladesh has also agreed to remove tariffs, supplementary duties, and regulatory duties on about 4,500 US products, one of the largest tariff-reduction steps in recent years.
These commitments are intended to reduce Bangladesh’s trade imbalance with the United States and deepen economic cooperation.
Concerns about economic independence
Critics of the agreement argue that the deal was finalised quickly and could affect Bangladesh’s economic autonomy and long-term development strategy.
Some provisions in the agreement also involve easing non-tariff barriers, accepting US safety standards, and expanding market access for American products such as dairy, beef, machinery, and ICT equipment.
There are also rules-of-origin requirements and sourcing conditions that could be difficult for Bangladesh’s manufacturing sector to meet, particularly because the garment industry depends heavily on imported raw materials, especially from China.
For example, over 80 percent of Bangladesh’s imports from China are raw materials used in the garment sector, highlighting how supply-chain realities could complicate compliance with US trade conditions.
Political timing and economic pressure
The agreement was signed just days before a national election, raising questions about the speed of negotiations and public consultation.
Bangladesh’s economy has also been under pressure in recent years, with:
rising inflation
political instability
declining garment exports in some periods
These economic challenges likely influenced the government’s decision to secure tariff relief from the United States.
The bigger picture
The US–Bangladesh trade deal shows how modern trade agreements often involve tariffs, market access, supply-chain conditions, and large purchase commitments, not just export concessions.
While the agreement offers short-term support for Bangladesh’s garment exports, it also requires long-term economic adjustments, particularly in imports, sourcing patterns, and trade policy alignment.
The outcome will depend on how effectively Bangladesh balances export gains with the cost of increased imports and policy commitments.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
