FTA is a free trade agreement to create a free trade area. It happens between two states under international law.
The garment industry is the largest export oriented industry in Bangladesh and one of the main sources of remittances.
The United States is one of Bangladesh’s main export markets. But, after Donald Trump came to power for a second term in the United Stated, they proposed for imposing an additional tariff of 37% on Bangladeshi Exports. However, which is currently in hold for three months depend on some conditions.
Vietnam and India are the main competitors of Bangladesh in this sector. These two countries have already proposed FTA agreements with the US.
Currently the percentage of tariff for Vietnam is only 7% on garment export to the US. On the other contrary, Bangladesh is paying more than 15% of tariff.
Previously, Bangladesh had proposed several times to US to sign FTA. But US didn’t show interest at that time.
However, a potential turning point could be reached in this Bilateral trade. Because, the US has agreed for talks. It will be signed depending on conditions this time.
If this agreement comes into effect, it could create a big opportunity for Bangladesh’s exports to the huge market like the US.
Commerce Secretary, Mahbubur Rahman stated that the United States has asked for a draft of the agreement. They want to start the process quickly.
A dedicated team of 8 members already has been formed to draft the FTA. Additional Secretary (FTA) of the ministry will lead and instruct the team. The committee has been given time of 15 days to complete the draft. And it must be submitted to the Commerce Secretary in that time.
Hopefully, it will prove a balanced and advantageous for both countries.
