The US has extended its generalised system of preferences to a new product — travel goods — but despite being a strong player in the segment, Bangladesh will miss out on the opportunity as the trade benefit is currently suspended for the country. The US government last month included some travel goods like luggage, backpacks, handbags, and pocket goods such as wallets in the GSP mainly for least developed countries. The countries that will be benefitted from the move are Myanmar, Nepal, Cambodia and some African nations under the African Growth and Opportunity Act (AGOA), even though the countries are not strong in manufacturing these goods. US retailers and brands urged the United States Trade Representative (USTR) to offer GSP to more countries, as the existing countries enjoying the trade benefit cannot meet the demand for travel goods. Bangladesh has already applied to the USTR, the chief trade negotiation body of the US government, for the reinstatement of the trade privilege, which was scrapped in June 2013 on grounds of poor labour rights and workplace safety. But the Obama Administration did not give in, although Bangladesh has fulfilled almost all the 16 conditions attached to the revival of the GSP. Rick Helfenbein, president and CEO of American Apparel and Footwear Association, in a public hearing last week said although allowing GSP for travel goods to Myanmar and other AGOA countries is a good step, they are relatively small and incapable of supplying the goods as per required demand. Bangladesh is a major manufacturer of travel goods. “Keep in mind, this is a two-billion-unit industry but only 200,000 units in total came from AGOA…that’s not even 1 percent,” Helfenbein said in the public hearing. “Our observation is that the privilege that you have extended is not enough to make a significant industry difference and China, frankly, will continue its dominance over the travel goods industry,” he added. Helfenbein also urged the US government to extend the number of eligible countries for a realistic and meaningful opportunity to move production out of China. China owns 85 percent of the US travel goods markets, meaning 8.5 out of 10 items are made there, he said. Providing GSP travel goods eligibility will facilitate a more diversified supply chain, and will enable all these countries to expand their market share, thus supporting the goal of employment across the developing world, he added. Competitiveness of the developing countries is undermined unless they get duty-free access, and productivity in developing countries just cannot match the level in China, he said. Today, only a few GSP eligible countries have the ability to produce travel goods, particularly complex travel goods, he added. Many AGOA countries and LDCs simply lack the capacity to compete with China, he said. Given the choice, if other GSP countries are not allowed on the playing field, production will be slow or more likely, hesitant to move. Under the programme, 122 beneficiary developing countries (BDCs) export around 3,500 products duty-free to the US. The least-developed BDCs are eligible to export another 1,500 products duty-free. In 2015, exports that entered the US duty-free under the GSP programme from all countries totalled nearly $17.7 billion.
