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Business

Will Bangladesh Get Quota-free Access?

Shamim Ahsan

Christina Rocca

“I am not so hopeful, it will be a very hard job," said Christina Rocca, US Assistant Secretary for South Asian Affairs, in response to Bangladesh's plea for duty-free access of its apparels to the US market. The note of foreboding was not out of the blue, but, in Bangladesh, the garment industry leaders refuse to get depressed by Rocca's comment. They are rather quite confident that Bangladesh is going to make it.

Now, where Bangladesh will ultimately stand, only time can say. But one thing is for sure, getting duty-free access to US market is something Bangladesh desperately needs for its garment industry. And it is not going to be easy.

The country's garment industry is passing through a transition period. After having grown and flourished in a quota-restricted world, it is now entering into a fiercely competitive quota-free world. The industry is not yet on a strong footing and far from being in a position when it can compete with giant garment exporting countries like China and India. Experts and leaders in the garment business are thus trying to secure some advantages that they believe would save the sector from at least an immediate collapse in export volume. Getting duty-free access to the US market is that answer.

Due to the last MFA phase out the export volume of Bangladeshi apparels may drastically fall

Apparel manufacturer and exporter leaders sound very optimistic. In fact a BGMEA team led by its President Annisul Huq made a visit to USA in the last week of April to pursue Bangladesh's case. Grameen Bank's Dr Muhammad Yunus was in the team and he used his friendship with former first Lady and Senator Hillary Clinton and other connections in the highest tier of American administration to help out the team. The team met several Senators and Congressmen including senior Republican Congressmen Mac Cain, Joseph Crowley besides Hillary Clinton to pursue Bangladesh's case. Now, after all that effort, a bill is going to be placed seeking duty-free access to US market for some of the LDCs (Least Developed Countries) including Bangladesh.

At present, 33 out of 49 LDCs enjoy duty-free access to the US market. Among them most are African and South American countries. And among the 16 that are not presently receiving this favour four countries are certainly not going to get it. "The present US policy is that they are not going to provide this facility to countries that do not have democracy," Anwarul Alam Chowdhury Parvez, Second Vice President of BGMEA and a member of the touring BGMEA team, explains. Bangladesh is among the remianing 12 that, he believes, is definitely going to get the green light.

In Dhaka the business leaders, who met Secretary Rocca, pointed out that France with an annual export to US that stand at 8,900 crore US dollars, is currently paying around 33 crore US dollars as duty. Interestingly, US earns the same amount as duty from just 200 crore US dollars worth of Bangladeshi products. As one of the poorest countries Bangladesh should get a better deal, they argued.

But good arguments alone would not win the case in favour of Bangladesh. The BGMEA leadership is doing their bit. "We have appointed lobbyists and are in constant touch with our buyers who are also backing us," Pervaz relates. But the government will also have to play a decisive role, he points out. " In the end we are just a private organisation, and there is a huge difference between our appeal and that of the government. Besides, since we have direct interest in the deal, our argument regarding the country's interest may not be taken seriously," he argues. He however hastens to add that so far the Bangladesh government is giving them full support. "Specially the embassy people in USA have been constantly with us and have done their best for us during our last month's visit," he reveals.

BGMEA leaders are lobbying to get duty free access for Bangladeshi apparels to the US market.

He informs that a team of policy-makers and businessmen from the US are visiting Bnagladesh next month on the invitation of BGMEA. Foreign Minister Morshed Khan is also visiting USA next month to pursue the case, which he believes will have a positive impact on Bangladesh's chance of getting duty-free access. "If the government continues to assist we stand a very, very good chance to make it," he hopes.

There are hurdles that we still need to get over though, says Parvez. The American Federation of Labour Organisation, a trade union association, is an extremely powerful body in the US. If they taken a stand against Bangladesh citing unsafe working conditions, low pay, and various other problems many of the country's garment factories are afflicted with, Bangladesh's chances to get duty-free access might just get pigeonholed. Referring to the recent Savar garment factory collapse that killed over 80 and injured around 100, he said that we need to be very careful to tackle such issues in near future, otherwise in our zeal to realise workers rights we might end up causing serious damage to the industry.

Five months into the last MFA phase out, the country's garment industry has started to feel the heat. Handicapped by infra-structural weakness, relatively longer 'lead time', poor but extremely expensive port facilities, Bangladesh needs more time to get into a position when it can compete with the giant garment exporting nations. That is precisely why Bangladesh needs duty-free access to the US market which would work as a definite protection at least for the time being. But for that to happen, everybody the business leaders, the labour organisations and the government will have to work together.