Bangladesh, US sign trade deal; reciprocal tariff to drop to 19%

Bangladesh and the United States on Monday signed the Agreement on Reciprocal Tariff.

On the Bangladesh side, the agreement was signed by Commerce Adviser Sheikh Bashir Uddin and National Security Adviser Khalilur Rahman, while US Ambassador Jamieson Greer, the United States Trade Representative, signed on behalf of the US. Negotiations on the agreement spanned more than nine months, beginning in April last year, according to a post published at 10:45pm on Monday on the Chief Adviser’s verified Facebook page.

Ambassador Greer lauded Chief Adviser Muhammad Yunus for his overarching leadership of the negotiation process and praised the Bangladesh negotiating team for its “incredible efforts.” “This agreement will fit Bangladesh into US trade policy,” he said.

Following the signing, Commerce Adviser Sheikh Bashir Uddin, who led the Bangladesh side in the negotiations, said the agreement marked a historic new level in bilateral economic and trade relations. “It will provide substantially enhanced access for Bangladesh and the US to each other’s respective markets,” he said.

Under the agreement, the US will further reduce the reciprocal tariff to 19 percent, which was originally set at 37 percent and later reduced to 20 percent in August last year. In addition, the US committed to establishing a mechanism under which certain textile and apparel goods from Bangladesh, produced using US-origin cotton and man-made fibre, will receive zero reciprocal tariff in the US market.

“The reduction of reciprocal tariffs will provide further advantages to our exporters, while zero reciprocal tariffs on specific textile and apparel exports from Bangladesh using US inputs will give substantial added impetus to our garments sector,” said NSA Khalilur Rahman, who served as Bangladesh’s chief negotiator.

The agreement was approved by the Council of Advisers on Monday and will come into effect once notifications are issued by both sides.

Commerce Secretary Mahbubur Rahman and Assistant US Trade Representative Brendan Lynch were present at the signing ceremony.