US Tariffs: Bangladesh starts intense talks in DC

Bangladesh and the US started an intense negotiation on tariffs, as the Trump administration has set some tough terms and conditions for securing the lower tariff rate in the US market.

Commerce Adviser Sk Bashir Uddin flew to Washington to attend the meeting with the United States Trade Representative (USTR). He joined National Security Adviser Khalilur Rahman, who is already in Washington for negotiations. The adviser was scheduled to hold the meeting with the USTR at 11:30am Washington DC standard time.

Commerce Secretary Mahbubur Rahman is also scheduled to fly to the US in a day or two to attend the meeting to be held on July 8 in Washington to reach a consensus to sign the tariff agreement to secure the US market.

Chief Adviser Prof Muhammad Yunus called the commerce secretary to his office and enquired about the negotiation on the reciprocal tariff issue with America.

"I will join the July 8 meeting in Washington," the commerce secretary told The Daily Star over phone.

Many issues have been discussed over the last three months and both countries have reached a consensus on many issues. However, in some cases, Bangladesh could not agree as those are very tough for the country and for the business.

Bangladesh and the US have signed a Non-Disclosure Agreement (NDA), and this is why no information can be shared. Apart from the reciprocal tariffs, both the countries have been discussing the Rules of Origin (ROO) issue in the final negotiation.

Of the many issues, Trump administration has given some tough conditions in (ROO) that Bangladesh could not agree yet as there is a possibility of losing the business, said a source, who is familiar with the negotiation, asking not to be named.

The United States has been asking for regional value addition to export, rather than the domestic value addition to export of goods that is unacceptable as such moves may affect the local business, the source added.

In the draft of the negotiation document, the US wants Bangladesh imposes embargo or fixing high tariff on the countries in which the American government also puts embargo, which is almost impossible for Bangladesh.

For instance, if the US places embargo on import of Chinese goods to the American markets, Bangladesh will also have to put the similar kinds of embargo on the Chinese goods. If this is agreed, Bangladesh's business may face a lot of challenges in international trade as Bangladesh is mainly an import dependent country at least for industrial raw materials.

It is very difficult to build a consensus following such tough conditions given by the US, said Commerce Secretary Mahbubur.

Trump administration has agreed to allow 20 percent duty on import of Vietnamese goods, and Vietnam agreed to allow zero duty on import of American goods to Vietnam.

The Vietnam and the US could come to an agreement because Vietnam's export to the United States is nearly $200 annually, which indicates that their interdependence is higher than other countries.

So, they could reach a consensus easily, Mahbubur said. Bangladesh also offered zero duty on import of many US goods, but interdependence between the US and Bangladesh is not as much as Vietnam. But still the US is not agreeing to sign the deal and giving more tough conditions.

The total value of bilateral trade between Bangladesh and America is $10 billion of which Bangladesh exports goods worth $8 billion and imports the US goods worth $2billion.