TDS Desk:

Bangladesh and the United States have signed a reciprocal trade agreement cutting US tariffs on Bangladeshi goods and granting American exporters expanded access to the South Asian market, in return for Dhaka’s commitment to regulatory and labour reforms and a series of accompanying commercial deals.

The agreement, signed on Monday after nine months of negotiations, cuts the US “reciprocal tariff” on qualifying Bangladeshi goods to 19 percent, from 37 percent imposed in April last year. Washington also committed to set up a mechanism allowing certain Bangladeshi textile and apparel items made with US cotton and fibre to enter duty-free.

In return, Bangladesh pledged to remove a series of non-tariff barriers for US exports, accept American vehicle and pharmaceutical standards, and adopt stringent new rules on labour rights, intellectual property and anti-corruption.

“This agreement will fit Bangladesh into US trade policy,” said Ambassador Jamieson Greer, the US trade representative, who signed the deal alongside Bangladesh’s commerce adviser, Sk Bashir Uddin, and national security adviser, Khalilur Rahman.

Greer praised Chief Adviser Dr Muhammad Yunus for his “overarching leadership” of the talks and the Bangladesh negotiating team for its “incredible efforts”.

The deal, which must still complete domestic formalities in both countries, marks “a historically new level in our bilateral economic and trade relations,” Bashir Uddin said. He said it would provide “substantially enhanced access” for each country’s goods.

For Bangladesh, a key benefit is the reduced and zero-tariff pathway for its crucial garment exports. Khalilur Rahman, the chief negotiator, said the tariff cut would “grant further advantage to our exporters,” while the zero-tariff mechanism for specific textiles would “give substantial added impetus to our garments sector”.

The White House released a detailed joint statement setting out Bangladesh’s extensive commitments. These include amending labour laws to protect freedom of association and collective bargaining, banning imports made with forced labour and strengthening enforcement of environmental laws.

On market access, Bangladesh agreed to provide “significant preferential market access” for US industrial and agricultural goods, including machinery, motor vehicles, medical devices, dairy, beef, poultry, tree nuts and fruit. It also committed to accept US motor vehicle safety and emissions standards, FDA certificates for medical devices and pharmaceuticals, allow free cross-border data flows and support the adoption of a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization.

The agreement includes provisions to strengthen intellectual property protection and address trade distortions caused by subsidies and state-owned enterprises. Both sides also committed to enhance supply chain resilience and cooperate on export controls.

The statement cited several accompanying commercial deals, including Bangladeshi purchases of about $3.5 billion in US agricultural products such as wheat, soy, cotton, and corn, and an estimated $15 billion in US energy products over 15 years. It also mentioned Bangladeshi procurement of US aircraft.

The United States said its Export-Import Bank and International Development Finance Corporation would consider backing investments in Bangladesh in collaboration with US private sector partners.

“The United States and Bangladesh, 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,” the joint statement concluded.

The interim government’s advisory council has already approved the agreement, which will take effect once the two sides issue formal notifications. The agreement builds on the US-Bangladesh Trade and Investment Cooperation Forum Agreement signed in 2013.