Ominous signs are there for the country’s RMG export business as 12 countries led by the United States of America are going to launch a new duty-free marketing system under a deal namely Trans-Pacific Partnership (TPP) from this year, which is likely to affect seriously the readymade garments market of Bangladesh. The government of Bangladesh, the FBCCI and the RMG exporters are seriously worried over the future of the garments export business due to the possibility of losing the US market. The 12 countries which comprise the TPP are the USA, Canada, Australia, New Zealand, Japan, Brunei, Chilli, Malaysia, Mexico, Peru, Singapore and Vietnam. These 12 countries control 40 percent of the world economy. According to sources in the commerce ministry, at present the average rate of duty on commodity exports from Vietnam to the USA is 8.34 percent. But after the execution of the TPP deal, this duty will cease to exist. On the other hand, presently, in the US market the average duty rate on Bangladeshi garments is 15.68 percent. As a result, Bangladesh will be unable to compete with Vietnam when the TPP will come into force. BGMEA sources state that RMG exports to the USA from Bangladesh stood at $5 billion last year while it was $ 5.29 billion in 2013. In other words, Bangladesh RMG exports to the USA declined by 5.47 percent in a year. Similarly, the RMG exports to Canada were $1 billion in 2013, but fell by 7percent to $ 0.93 billion. Former president of the BGMEA and president of Bangladesh exporters’ association Abdus Salam Murshedy said, “Vietnam already exports much more RMG to the US market than the exports from Bangladesh. After the implementation of the TPP, Vietnam will be entitled to export garments to the USA without any duty and as a result, the RMG exports there from this Asian country will increase considerably. On the other hand, Bangladesh will have to pay export duty at the present rate. Consequently, the prices of Bangladesh RMG will increase compared to Vietnam and Bangladesh will lose US customers.” The influential daily Guardian of the United Kingdom (UK) in a report on May 12 said the US is combining countries adjacent to China in the TPP to reduce the influence of this communist state. No other country is anywhere near China in exporting readymade garments and steel to the USA. Under the new deal, other countries will be able to export these items to the USA without any duty. And as a result, the exports from China to the USA will decline. The USA and the 11 other countries are moving quite secretly towards the implementation of the TPP. The initiative to form the TPP was taken in 2009 and the representatives of the 12 countries in their first meeting in 2011 reached a consensus on the issue. But what is incorporated in the TPP and the conditions required to be fulfilled for becoming a member of it, have not been disclosed by the USA. There is a debate over the TPP in the USA also. President Barack Obama is facing criticism at home for maintaining strict secrecy over the TPP. In his defence, he has said it is not true that the deal is being concluded secretly. Executive director of CPD Dr Mustafizur Rahman said that due to the TPP the buyers of the USA will now be able to import various commodities including RMG from Vietnam without duty. So they are opting for Vietnam and this will cause long-term harm to Bangladesh. Commerce minister Tofail Ahmed said, “Consequent upon the TPP deal, Vietnam will be entitled to export RMG to the USA without any duty. On the other hand, Bangladesh will have to export garments there on payment of 15 percent duty and tax. Hence, Bangladesh may lose the capacity to compete with Vietnam and we are worried over this.”
