Asst USTR Christopher Wilson in an exclusive interview with FE

US traders want to see a transparent regulatory environment in Bangladesh, says Christopher Wilson

| Updated:
August 27, 2022 6:06:55 p.m.

Less than expected reform measures to secure labor rights are holding back the restoration of the Generalized System of Preferences (GSP) for Bangladesh by the United States, a senior US trade official has said.

“Bangladesh has taken some initial steps to amend its labor laws, but workers here continue to be subjected to unfair labor practices. collectively organizing for change,” the Deputy U.S. Trade Representative (USTR) said. Christopher Wilson.

Wilson arrived in Bangladesh on Wednesday and had meetings with government officials from the ministries of ICT, agriculture, trade and foreign affairs as well as business leaders. Data governance, technology, business issues and business relationships, among others, were discussed in the meetings.

The main purpose of his visit was to help strengthen bilateral trade relations between the United States and Bangladesh. Dhaka has asked for a long period of reinstatement of the suspended installation of the GSP in the country’s largest garment market in particular.

In an exclusive interview with The Financial Express, he said that the government of Bangladesh has indicated that further amendments to labor laws will take place soon.

“While the U.S. GSP program has currently expired and must be reauthorized by the U.S. Congress, we intend to remain constructively engaged on these issues,” he said, responding to a question about the possibility of restoration of the GSP facility for Bangladesh.

Mr. Wilson noted that the inability to qualify for the GSP also prevented funding for development projects in Bangladesh from the US International Development Finance Corporation (DFC).

When his attention was drawn to the desired outcomes of the Trade and Investment Cooperation Framework Agreement (TICFA), which Bangladesh and the United States signed in November 2013, he said that the pact had been a valuable mechanism for organizing positive trade dialogues and exploring ways to reduce barriers and expand trade.

In 2013, the United States suspended eligibility for GSP benefits citing the lack of internationally recognized labor rights in Bangladesh.

“The United States is committed to supporting Bangladesh’s journey toward labor rights, including through targeted development assistance.”

Mr. Wilson mentioned that the United States was Bangladesh’s “number 1” source of foreign direct investment (FDI) in 2021 with more than $585 million invested in a year. The United States is also the largest historical source of FDI, with a total investment of $4.3 billion.

American companies play an important role in the development of Bangladesh’s economy – from the energy and financial services sectors to emerging technologies and the digital economy.

“Bangladesh can take several steps to attract more investment. For example, American companies want to see a transparent and predictable regulatory environment, and good public procurement practices,” he said, adding that this are some of the steps that can unlock more US investment here.

The United States remains a rapidly growing destination for Bangladesh’s Ready Made Garment (RMG) exports. Merchandise trade between the two countries reached more than $10 billion in 2021, and the United States seeks to continue increasing bilateral trade with Bangladesh, he noted.

“Bangladesh is an attractive trading partner, as it has one of the fastest growing economies in the world, a huge and growing middle class population and an enthusiastic and willing workforce.”

Responding to a question whether the United States was considering offering a tariff preference to Bangladesh after it graduates from least-developed country (LDC) status, the senior USTR official said that US tariff preferences are within the purview of Congress, and country preferences are not currently being considered.

“I want to emphasize that the United States will go nowhere after Bangladesh graduates from LDC status, and we will continue to work to increase two-way trade and strengthen economic growth.

“We already have the foundation to expand our economic relationship. The United States is ready to move as fast as Bangladesh wishes – to deepen our trade and investment relationship.”

When asked if the current policy support from the United States would continue to boost exports of Bangladeshi RMG items to his market in the future, Mr. Wilson replied that the United States is a prime destination for Bangladeshi RMG exports, but this is largely based on commercial demand.

“One of the Biden administration’s top economic priorities is supply chain diversification for a range of critical technologies, health and pharmaceutical products, and a range of other important items. There will certainly be a market in the United States – as far as Bangladesh can build these industries.”

Regarding the mandatory fumigation of imported US cotton at ports in Bangladesh, he said the procedure was not necessary as all US cotton goes through several processes, including ginning and bale compression, which remove the threat harmful insects. Therefore, there is no threat of harmful pests arriving in Bangladesh via US cotton.

“Removing the requirement to fumigate US cotton in Bangladesh would greatly benefit both our economies. It would help reduce costs and ensure a stable supply of high-quality US cotton for the local RMG industry. hope this matter will be resolved soon,” he adds.

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