POST TIME: 20 August, 2019 00:00 00 AM / LAST MODIFIED: 19 August, 2019 08:58:04 PM
Apparel export to US rise further amidst China-US trade tension
Earnings grow 14.49pc during July-June of FY19

Apparel export to US rise further amidst China-US trade tension

This file photo shows an employee busy working at a garment factory unit in the capital. Independent photo

The country’s apparel exports to the US has registered a  significant growth from 2018 to 2019 with US buyers shifting orders from China to Bangladesh and other countries due to the on-going US-China trade tension, industry players have said.

 Experts and exporters say the country’s ready-made garment (RMG) export to the US might rise further in the coming months, following US president Donald Trump’s threat issued a few weeks back to impose tariffs on more Chinese products including apparel items.    

Bangladesh’s earnings from readymade garment exports to the US in July-June FY (2018-19) grew by 14.49 per cent to $6.13 billion from $5.35 billion in the same period of FY (2017-18), according to the data of the Export Promotion Bureau (EPB).

Experts and exporters said that Bangladesh’s RMG exports to the US had been growing as US buyers were shifting orders from China to Bangladesh and other countries, though US president Donald Trump was yet to impose tariffs on Chinese apparel products.

Exporters also said, “Our currency has depreciated against the dollar, and that could be another reason behind the growth of exports to the USA. We are getting Generalised System of Preferences (GSP) facilities from the European countries, helping us to increase exports to Europe as well.”

Talking to The Independent, Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), said that this would open up opportunities for the Bangladesh readymade garment sector.

He pointed to another factor that could be contributing to the current trend. “Our capacity has also increased. We can produce any quantity of garments items as we have expanded our operations over the years.” he added.

"But," he said, “we are not getting the right price from the buyers.”

The government had announced a cash incentive for selling in non-traditional markets back in 2010, which was 5 per cent at that time. It is now 4 per cent.

But the incentive eventually helped achieve a two-digit export growth rate, he said.

Explaining the reason, Rahman said apparel-makers previously did not want to go to those markets because of the difficulties involved and the time spent to enter a new market. But because of getting duty-free access and cash incentives, garments owners were now exploring new destinations and markets.    

“China, the world’s largest apparel supplier, has started importing products from us because the Government of China has allowed duty-free access to over 5,000 Bangladeshi products, which, eventually, enhanced the export growth of the apparel sector,” he explained.

About 40 to 50 crore people in China belonged to the high-middle income group, said Siddiqur.  

The inspection by Accord and Alliance had helped remediate the factories and prompted factory owners to emphasise workplace safety, which lifted the country’s image before foreign buyers, said Siddiqur.

The buyers became worried with the US and China engaging in a trade war for months with both countries imposing tariffs on each other’s products worth over $250 billion

 Apparel exporters said that Bangladesh’s exports to the US would increase further if Donald Trump went ahead with his threat to impose tariffs on more Chinese products, including apparel items.

Earlier this month (August), Trump announced the slapping of a 10 per cent tariff on $300 billion of Chinese imports including apparels from next month, vexed by the tardy progress of the US-China dialogue to reach an agreement on trade.