The International Business Forum of Bangladesh (IBFB) convened a roundtable discussion today at its conference room in Tejgaon, Dhaka, focusing on “Revamping USA-Bangladesh Trade.”
Dr. Anisuzzaman Chowdhury, Special Assistant to the Chief Adviser, graced the event as the chief guest, with IBFB President Lutfunnisa Saudia Khan presiding over the session.
Dr. Chowdhury emphasized the necessity of policy coordination, policy independence, and the identification of effective negotiation strategies to navigate the complexities of global trade.
He stated that the USA significantly influences world trade, adding, “Therefore, we must cultivate a robust lobby within the US and introduce a new dynamic to adapt to the evolving circumstances.”
In a press release, Dr. Chowdhury commented, “Given the altered international landscape, we must build self-reliance and ultimately diversify our economy. The government will establish a specialized trade negotiation body in anticipation of graduation.”
Dr. Zaidi Sattar, Chairman & CEO of the Policy Research Institute of Bangladesh (PRI), presented a keynote paper on the occasion.
Distinguished speakers at the discussion included Professor Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue (CPD), Syed Ershad Ahmed, President of the American Chamber of Commerce in Bangladesh, and Dr. Mahfuz Kabir, Research Director of the Bangladesh International Institute of Strategy Studies (BIISS).
In his keynote address, noted economist Dr. Sattar highlighted the “shocking” baseline tariff of a flat 10 percent across all imports.
He elaborated on the variable tariff rates applied to the top 60 trading partners and the higher tariffs imposed on nations designated as “Worst Trade Offenders,” citing the US tariff on China at 30 percent and China’s tariff on the US at 10 percent, while tariffs for Canada and Mexico stand at 25 percent.
Suggesting a negotiation-focused strategy, he proposed engaging the US to reduce tariffs on key US export items such as agro-products, machinery, and automobiles. He also recommended focusing on low-revenue items (like cotton and scrap metal, where tariffs are already near-zero), adhering to the Most Favored Nation (MFN) principle, and lowering Bangladesh’s own tariffs on non-RMG items (e.g., footwear) to mitigate anti-export bias.
Dr. Sattar noted that trade diversion could benefit Bangladesh due to China’s significant tariff burden (54 percent), while acknowledging the risk of a one percent contraction in global GDP and a three percent decline in trade, with Asia being particularly vulnerable.
Regarding the RMG sector, Dr. Zaidi Sattar suggested collaborating with buyers to share increased costs, emphasizing that limited bargaining power makes price adjustment crucial.
He pointed out that China and the US, the world’s two largest economies, constitute over 40 percent of global GDP, with the US at US$26 trillion and China at US$16 trillion.
“These two nations also represent the largest trading economies globally, accounting for 33 percent of world trade. China is the largest exporter, while the United States is the largest importer,” Dr. Sattar added.
Professor Mustafizur Rahman advocated for strengthening negotiating capacity. “We can sign a Free Trade Agreement (FTA) or a Preferential Trade Agreement (PTA) with the US, but it will not be straightforward,” he cautioned.
“The US tariff is termed reciprocal, but in reality, it is often irrational and one-sided. We need to bring the tariff issue to the Trade and Investment Cooperation Framework Agreement (TICFA) platform, but we are not yet prepared for that,” the Distinguished Fellow of CPD stated.
Addressing the session chair, IBFB President Lutfunnisa Saudia Khan emphasized the USA’s significance as a major trade partner for Bangladesh, particularly as a leading market for the country’s exports, predominantly in the Ready-made Garments (RMG) sector.
She noted that the suspension of GSP benefits and the rise of protectionist policies in recent years have negatively impacted Bangladesh’s competitiveness in key sectors such as garments, leather, and light manufacturing, leading to decreased export performance, slower job growth, and dampened investor sentiment.
BIISS Research Director Dr. Mahfuz Kabir suggested that TICFA is the appropriate forum to discuss the issue and initiate the negotiation process.
“I believe that signing agreements like IPF or FTA will not be effective,” he added.
MS Siddiqui, Chairman of the Governmental Relation and Advocacy Committee of IBFB, moderated the roundtable discussion, which also included an open discussion session with participation from representatives of various chambers and trade bodies, as well as business leaders.
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