US-Bangladesh Trade Deal Cuts Tariffs to 19%

The United States and Bangladesh announced a new trade agreement on Monday that reduces reciprocal tariffs on Bangladeshi goods to 19 percent and establishes a mechanism for zero tariffs on certain textile and apparel imports using U.S.-produced cotton and manmade fibers, intensifying competitive pressures on Indian exporters in the key U.S. market.

The bilateral deal, signed in Washington, D.C., after nine months of negotiations starting in April of the previous year, was represented on the U.S. side by Trade Representative Jamieson Greer and on Bangladesh's side by Commerce Adviser Sheikh Bashiruddin and National Security Adviser Khalilur Rahman. It builds on an earlier adjustment last year that lowered tariffs on Bangladeshi exports from 37 percent to 20 percent, providing relief to the country's vital readymade garments sector, which accounts for over 80 percent of its export earnings and employs around four million workers.

Under the agreement, a specified volume of qualifying textile and apparel goods from Bangladesh will enter the U.S. market at zero reciprocal tariff rates. This volume is tied to the amount of U.S. textile inputs, such as cotton and synthetic fibers,...