RMG export to US: Bangladesh sees biggest fall among top 10 exporters

Female workers work at a clothing factory in Chattogram.File photo

Bangladesh has been the third largest exporter of apparel products to the US for quite some time. Yet, the Made in Bangladesh brands have had a bad time at the US markets recently with exports of readymade garments (RMG) to the US falling by one-third in 2023 and 36 per cent in this January, making the South Asian country the biggest loser among the top 10 apparel exporters.

The United States International Trade Commission (USITC), the US government agency that advises the legislative and executive branches on trade, opened an investigation on five countries including Bangladesh at the behest of the Office of the United States Trade Representative (USTR).

The agency will investigate how these five countries have occupied such a huge part of the RMG sector in the US. The main target of this investigation is to find whether any of these countries took control of the market by any unhealthy competition. The other four countries are – India, Cambodia, Indonesia and Pakistan.

According to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, US businesses imported $77.84 billion worth of clothing in 2023, down from $99.86 billion in the same period in 2022.

This marks a 22.05 per cent decrease in US apparel imports compared to the previous year.

Apparel exports from Bangladesh to the country that time decreased by 25 per cent or $2.44 billion while China, the top apparel exporter to the US market, experienced a 24.98 per cent slump, and Vietnam, the second largest exporter, saw a 22.29 per cent drop in exports.

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However, US businesses imported $6.04 billion worth of clothing in January 2024 – down by 16.53 per cent year on year. Apparel exports from China and Vietnam dropped by 2 per cent and 5 per cent in January respectively while Bangladesh experienced about a one-third drop in export during this period.

Replying to a query on whether there is any link between the USITC investigation and the fall in apparel exports, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said there is no relation between the investigation and the drop in exports.

He further said these clothing were exported in October-November last year when work orders were less. Besides, worker unrest over wages also disrupted production and overall exports dropped.

RMG exports of Bangladesh, according to the OTEXA, fell by 36.50 per cent year-on-year to $550 million in January from $866 million in January 2023. Though exports fell, Bangladesh’s share of the US markets still stands at 9.10 per cent.

Bangladesh is the third largest exporter behind China and Vietnam. China exported $1.41 billion worth of ready-made garments in January 2024 – a 2 per cent down from the corresponding period of the previous year.

Exports from Vietnam fell by 4.76 per cent to $1.20 billion. Bangladesh is followed by India and Indonesia. India exported to the US RMG products of $350 million, a drop of 27 per cent, while Indonesia exported $300 million, a drop of 34 per cent.

The other countries among the top 10 apparel exporters to the US are Cambodia, Mexico, Honduras, Italy and Pakistan. All of them witnessed a drop in exports up to 24 per cent except for Honduras, which saw a rise of 22 per cent to $ 150 million.

Though the USITC probe is not linked to the drop in exports, it is a serious issue, Centre for Policy Dialogue research director Khandaker Golam Moazzem observed.

He told Prothom Alo that the US is scrutinising the market capacity in view of labour and human rights. The government and trade organisations also took the matter seriously.

Bangladesh often makes commitments to ensure labour rights, Khandaker Golam Moazzem said, adding that, however, the government and private sectors often show sluggishness in their implementation.