US-Bangladesh joint statement, what’s in the trade agreement
The trade agreement, the United States and Bangladesh have agreed to will provide US and Bangladeshi exporters unprecedented access to each other’s respective markets, says a joint statement issued by the two countries.
According to the agreement, Bangladesh commits to provide significant preferential market access for US industrial and agricultural goods, including: chemicals; medical devices; machinery and motor vehicles and parts; information and communicational technology (ICT) equipment; energy products; soy products; dairy products; beef; poultry; and tree nuts and fruit.
Notably, the United States under the agreement will reduce the reciprocal tariff rate to 19 per cent on originating goods of Bangladesh.
The joint statement mentions, the US commits to establish a mechanism that will allow for certain textile and apparel goods from Bangladesh to receive a zero reciprocal tariff rate. This mechanism will provide that a to-be-specified volume of apparel and textile imports from Bangladesh can enter the United States at this reduced tariff rate, but this volume shall be determined in relation to the quantity of exports of textiles, e.g. US produced cotton and man-made fibre textile inputs, from the United States.
The US and Bangladesh joint statement, following the agreement, stated it will build upon longstanding economic relationship, including the US-Bangladesh Trade and Investment Cooperation Forum Agreement (TICFA), signed in 2013. The joint statement has been published on the White House website.
The agreement also emphasises on addressing non-tariff barriers that affect bilateral trade and investment in priority areas. As part of that Bangladesh will accept vehicles built to US Federal motor vehicle safety and emissions standards; accept US Food and Drug Administration (FDA) certificates and prior marketing authorisations for medical devices and pharmaceuticals; and remove any import restrictions or licensing requirement on US remanufactured goods or their parts.
United States and Bangladesh commit to address Bangladesh’s non-tariff barriers that affect bilateral trade and investment in priority areas, including by Bangladesh: accepting vehicles built to US Federal motor vehicle safety and emissions standards; accepting US Food and Drug Administration certificates and prior marketing authorizations for medical devices and pharmaceuticals; and removing any import restrictions or licensing requirement on US remanufactured goods or their parts.
Bangladesh has also made significant commitments to reform digital trade and regulatory framework. Bangladesh commits to permit the free transfer of data across trusted borders; support the adoption of a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization; follow science and risk-based processes to allow the import of safe US food and agricultural goods; remove barriers in the insurance market; digitalise its customs procedures; and adopt and implement good regulatory practices.
The joint statement mentions Bangladesh commits to protect internationally recognised labour rights, including adopting and implementing a prohibition on the importation of goods produced by forced or compulsory labour; amending labour laws to ensure that workers’ rights to freedom of association and collective bargaining are fully protected; and strengthening enforcement of labour laws.
Bangladesh commits to adopt and maintain high levels of environmental protection and effectively enforce its environmental laws; improve customs and trade facilitation; and address distortions caused by subsidies and state-owned enterprises.
Bangladesh also commits to a robust standard for intellectual property protection and enforcement, including ratifying or acceding to and fully implementing certain international intellectual property treaties. Bangladesh commits to groundbreaking provisions on geographical indications that will preserve US market access, particularly for US cheese and meat producers who rely on the use of common names.
The US and Bangladesh are committed to strengthening economic and national security alignment to enhance supply chain resilience and innovation through complementary actions to address unfair trade practices worldwide, as well as by combatting duty evasion, cooperating on export controls, and sharing information on inbound investment in respective territories.
In addition, Bangladesh commits to strengthen and enforce comprehensive anti-corruption laws.
Meanwhile, the United States shall work through its US institutions such as the Export-Import Bank of the United States (EXIM Bank) and the US International Development Finance Corporation (DFC), if eligible, to consider supporting investment financing in critical sectors in Bangladesh in collaboration with US private sector partners, consistent with applicable law.
Finally, the joint statement mentions that the United States and Bangladesh take note of recent and forthcoming commercial deals in the areas of agriculture, energy, and technology.
Basically it mentions a list of items Bangladesh will purchase from the US. For example, Bangladesh plans on procurement of aircraft; purchases of approximately USD 3.5 billion of US agriculture products, including wheat, soy, cotton, and corn, purchases of energy products, with an estimated value of USD 15 billion over 15 years.
The two countries stated that, consistent with their respective internal procedures, will promptly finalise the Agreement on Reciprocal Trade, and undertake domestic formalities in advance of the Agreement entering into force.