TPP signed

The Trans-Pacific Partnership agreement was signed on October 5. As Bangladesh is not a signatory, the country's garments sector (RMG) is likely to suffer as it will not get preferential treatment for RMG export to the TPP member countries. Some of our closest competitors like Vietnam used to pay 8.38 percent duty for RMG exports, but after TPP comes into effect, it will not have to pay any duty. This is bad news for our largest export earning sector. As pointed out by local economists, Bangladesh's competitive edge to the US, which is our single largest garment export destination, will erode gradually. 

There is no way to underestimate the importance of TPP, and our failure to get on board will have serious ramifications for the apparels industry. As there is no prospect of reducing the duty charged on our products, it is imperative that Bangladesh reduces the cost of doing business to remain competitive and on the cutting edge of the global RMG trade. 

Although a major blow to the country, perhaps it will provide the impetus our RMG sector needs to diversify into other non-traditional markets where the country enjoys duty-free access. The government needs to work with the RMG industry to seriously address the issue of reducing the cost of doing business, in particular, bringing down loan interest rates. The industry for its part must look into ways to boost productivity and diversify its product range. This is now a matter of highest national priority.