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Bangladesh Seeks Duty-Free Status for Apparel Made from US, Brazilian Cotton

The Bangladesh Garment Manufacturers and Exports Association wrote a letter to the U.S. Ambassador to Bangladesh on February 16th, requesting that duties on Bangladesh imports that use U.S. cotton be dropped. BGMEA president Siddiqur Rahman sent a similar appeal to Brazil.

Currently, cotton from these two countries have duty-free access to Bangladesh, so the letter–which was obtained by the Dhaka Tribune–said the same should be true for exports using those materials.

The move would help Bangladesh but also Brazil and the U.S., Rahman said. “Bangladesh has long been importing cotton from the US to make apparel for export… We firmly believe that US exports of cotton will grow significantly if apparel products made of the US cotton receive favourable treatment in terms of tariff in accessing the US market,” he wrote.

Apparel accounts for 80 percent of all Bangladesh exports. Of that, the U.S. is the largest export destination. Garment exports to the U.S. reached $5.11 billion from January through November of 2016, a 1.49 percent decline.

For Brazil, Rahman says there’s huge potential but not with the current 30 to 35 percent duties the country places on apparel products. Garment exports to Brazil totaled $41 million from July to December 2016, compared to $75 million during the same period in 2015.

The appeal comes at a time when Bangladesh is under scrutiny for its response to a worker strike in factories in Ashulia in December, which resulted in some employees being let go and criminal charges against others. Subsequently, the American Apparel and Footwear Association submitted a letter to the Bangladesh prime minister on behalf of the workers, and labor groups called for the country to lose its free trade status under the EU’s Generalized System of Preferences program. The BGMEA earlier this week addressed the concerns and clarified its support for workers’ rights.