United States is Bangladesh's largest buyer in the garment export sector. However, exports to the United States have declined significantly in the past few years. Still, five countries, including Bangladesh, dominate the apparel export market in the United States.
But how are these countries competing in the US apparel market?
The United States is launching an investigation to look into that and at the same time assess the overall situation, including the working environment, of workers in these countries.
But how are these countries competing in the US apparel market?
The United States is launching an investigation to look into that and at the same time assess the overall situation, including the working environment, of workers in these countries.
The United States International Trade Commission is launching this investigation into the garment sector of five countries.
Last year, the United States expressed concern over various issues including labor environment, workers' safety, wages, trade unions in Bangladesh. These issues will also dominate the investigation.
Garment industry owners in Bangladesh say buyers are not paying the rate at which production costs have risen in the past few years. At the same time, they say that the overall working environment of the garment sector in Bangladesh has improved.
As a result, Garment Manufacturers and Exporters Association BGMEA has given a pre-hearing report to this investigation committee of the United States calling for consideration of these issues in the investigation.
BGMEA Vice President Shahid Ullah Azim again thinks that this investigation is being done to pressure Bangladesh politically.
At the same time, labor leader Jolly Talukder stressed that the United States, the largest buyer of the garment industry, and the Bangladesh government should not use workers as 'political tools' in investigations.
The garment sector is important for the economy of Bangladesh. The country's International Trade Commission (USITC) is launching this investigation into five countries, including Bangladesh, which is a garment exporter to the United States.
The other four countries are India, Pakistan, Indonesia and Cambodia. These five countries along with Bangladesh are the top exporters of garments in the US market.
The USITC's investigation will try to find out how, and why, apparel made in these countries has become competitive in the U.S. apparel market. At the same time, the situation of the garment sector will also be evaluated in this investigation, said the persons related to the garment sector.
The hearings on the investigation begin on March 7 in Washington. The Bangladesh hearing will be held on March 11.
Ministry of Commerce and BGMEA will present their statements. President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Farooq Hasan said, "Pre-hearing reply has been given in this regard." We have shared our response. Will join the hearing virtually on March 11.”
After the hearing, the written statement can be submitted till March 22. Later on August 30, the USITC will submit the investigation report to the Trade Representative.
Regarding why the United States is investigating this matter, Mr. Hasan said, "In the last few years, the cost of production in Bangladesh has increased. US imports from all over the world, so many years we have less than their average unit price."
"Now our average unit price is higher. But that in no way proves that we're putting products out there at lower prices."
“Also the cost in Pakistan and China is much lower than our cost of production. But China is not in it. But I don't know what could be the reason for this. But we have responded", says Farooq Hasan. If workers are paid lower wages, there is an opportunity to say it is 'anti-competitive'. But noting that workers' wages have also increased by more than 56 percent since December 1, he added, "So it's now the responsibility of the United States to make sure that we get fair prices." So that their buyers pay a fair price.”
In the report given by BGMEA before the hearing in the International Trade Commission, it is said, “Bangladesh's cost of production has increased excessively. Electricity price has increased by 25 percent, gas price by 286.5 percent, diesel price by 68 percent. As a result, it has affected the transportation of goods.”
BGMEA also hopes that the US commission of inquiry will conduct an overall assessment of the competitive situation as well as the structural differences between supplier countries.
When asked what the next impact of this investigation of the United States on the clothing sector, Mr. Hasan said, “We don't think it will have much of an impact. Because we never get duty free facility in USA. Not yet, there is no chance of getting it in the future. So I don't think there will be any impact."
“Still talking to them will help us understand the purpose of this investigation. We want to know too. Because they didn't tell the details."
The industrial owner of the garment sector believes that Bangladesh is in a favorable position, including the labor environment. He said, “We feel we are getting a fair deal. We own everything. Because we don't have child labor here, we don't have captive labor that we have in China. Rather, we think we are in a much better position."
However, when asked whether the issues of Bangladesh trade union, labor environment, labor law will come up for hearing in this investigation, he said that the United States has not clearly stated anything about these issues.
Another leader of the organization, however, considers this investigation as a strategy to pressure the Bangladesh government politically.
The vice-president of the organization, Shahid Ullah Azim told BBC Bangla, "This investigation is being done to give political pressure. It is mostly a political matter. If more is imposed, it will be unfair. It will be too much. Because we have changed a lot in this sector.”
He said that various issues including wages, trade union, labor environment, worker welfare, safety may be discussed in this investigation. Although Bangladesh has made a lot of progress in these matters, Mr. Azim
The US President's 2024 Trade Policy Agenda and 2023 Annual Report were released on March 1.
Last year, the United States expressed concern over various issues including labor environment, workers' safety, wages, trade unions in Bangladesh. These issues will also dominate the investigation.
Garment industry owners in Bangladesh say buyers are not paying the rate at which production costs have risen in the past few years. At the same time, they say that the overall working environment of the garment sector in Bangladesh has improved.
As a result, Garment Manufacturers and Exporters Association BGMEA has given a pre-hearing report to this investigation committee of the United States calling for consideration of these issues in the investigation.
BGMEA Vice President Shahid Ullah Azim again thinks that this investigation is being done to pressure Bangladesh politically.
At the same time, labor leader Jolly Talukder stressed that the United States, the largest buyer of the garment industry, and the Bangladesh government should not use workers as 'political tools' in investigations.
The garment sector is important for the economy of Bangladesh. The country's International Trade Commission (USITC) is launching this investigation into five countries, including Bangladesh, which is a garment exporter to the United States.
The other four countries are India, Pakistan, Indonesia and Cambodia. These five countries along with Bangladesh are the top exporters of garments in the US market.
The USITC's investigation will try to find out how, and why, apparel made in these countries has become competitive in the U.S. apparel market. At the same time, the situation of the garment sector will also be evaluated in this investigation, said the persons related to the garment sector.
The hearings on the investigation begin on March 7 in Washington. The Bangladesh hearing will be held on March 11.
Ministry of Commerce and BGMEA will present their statements. President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Farooq Hasan said, "Pre-hearing reply has been given in this regard." We have shared our response. Will join the hearing virtually on March 11.”
After the hearing, the written statement can be submitted till March 22. Later on August 30, the USITC will submit the investigation report to the Trade Representative.
Regarding why the United States is investigating this matter, Mr. Hasan said, "In the last few years, the cost of production in Bangladesh has increased. US imports from all over the world, so many years we have less than their average unit price."
"Now our average unit price is higher. But that in no way proves that we're putting products out there at lower prices."
“Also the cost in Pakistan and China is much lower than our cost of production. But China is not in it. But I don't know what could be the reason for this. But we have responded", says Farooq Hasan. If workers are paid lower wages, there is an opportunity to say it is 'anti-competitive'. But noting that workers' wages have also increased by more than 56 percent since December 1, he added, "So it's now the responsibility of the United States to make sure that we get fair prices." So that their buyers pay a fair price.”
In the report given by BGMEA before the hearing in the International Trade Commission, it is said, “Bangladesh's cost of production has increased excessively. Electricity price has increased by 25 percent, gas price by 286.5 percent, diesel price by 68 percent. As a result, it has affected the transportation of goods.”
BGMEA also hopes that the US commission of inquiry will conduct an overall assessment of the competitive situation as well as the structural differences between supplier countries.
When asked what the next impact of this investigation of the United States on the clothing sector, Mr. Hasan said, “We don't think it will have much of an impact. Because we never get duty free facility in USA. Not yet, there is no chance of getting it in the future. So I don't think there will be any impact."
“Still talking to them will help us understand the purpose of this investigation. We want to know too. Because they didn't tell the details."
The industrial owner of the garment sector believes that Bangladesh is in a favorable position, including the labor environment. He said, “We feel we are getting a fair deal. We own everything. Because we don't have child labor here, we don't have captive labor that we have in China. Rather, we think we are in a much better position."
However, when asked whether the issues of Bangladesh trade union, labor environment, labor law will come up for hearing in this investigation, he said that the United States has not clearly stated anything about these issues.
Another leader of the organization, however, considers this investigation as a strategy to pressure the Bangladesh government politically.
The vice-president of the organization, Shahid Ullah Azim told BBC Bangla, "This investigation is being done to give political pressure. It is mostly a political matter. If more is imposed, it will be unfair. It will be too much. Because we have changed a lot in this sector.”
He said that various issues including wages, trade union, labor environment, worker welfare, safety may be discussed in this investigation. Although Bangladesh has made a lot of progress in these matters, Mr. Azim
The US President's 2024 Trade Policy Agenda and 2023 Annual Report were released on March 1.
The report was published on the website of the United States Trade Representative (USTR).
In that report, it is said about Bangladesh that in 2023, USTR has urged the Ministry of Commerce of Bangladesh in favor of workers' rights.
It said that after the withdrawal of Bangladesh's GSP facility in 2013, the quality of protection and rights of workers became a cause for concern. In September last year, the United States also raised concerns about labor rights in Bangladesh at the Trade and Investment Cooperation Forum Agreement (TICFA) meeting of the two countries.
The report has also called for workers in EPZs and special economic zones to be given the opportunity to form trade unions.
BGMEA vice-president Shahid Ullah Azim said about trade unions, "Bangladesh is lacking in this one thing, trade union in every factory."
"Actually we have a bitter experience with the jute industry. The industry was destroyed because of the trade union. Even then it happened in many factories. Now we don't stop. The US wants to make it mandatory. It can be discussed."
However, the labor leaders emphasized that the investigation of the United States, Bangladesh's largest buyer in the garment sector, should not be used as a political tool for the workers. Jolly Talukdar, general secretary of the Garments Sramik Trade Union Centre, said, "If this investigation is to use the workers as a tool to solve a political problem, it will be bad."
"Workers cannot be used as political tools. Buyer countries consider the specific wages of our workers, but do not raise prices for clothing. Trade unions, wages, working environment, safety are all interrelated. As a result, if one is less, the other threatens", said Jolly Talukdar.
Why is the export of clothing in the United States decreased?
The US Department of Commerce's Office of Textiles and Apparels (OTEXA) reveals how much a country exports to the United States in terms of dollars.
According to the organization, in the year 2022, the country made clothes from Bangladesh worth 9.72 billion dollars. Which is 50 percent more than the previous year i.e. 2021. But it was precisely post-Covid-19 that exports were lower in 2021.
But in 2022, the export was 9.72 billion dollars, but in 2023, it did not increase but decreased. Exports in 2023 are 7.29 billion dollars. Therefore, exports decreased by almost two and a half billion dollars or 25 percent in one year.
In that report, it is said about Bangladesh that in 2023, USTR has urged the Ministry of Commerce of Bangladesh in favor of workers' rights.
It said that after the withdrawal of Bangladesh's GSP facility in 2013, the quality of protection and rights of workers became a cause for concern. In September last year, the United States also raised concerns about labor rights in Bangladesh at the Trade and Investment Cooperation Forum Agreement (TICFA) meeting of the two countries.
The report has also called for workers in EPZs and special economic zones to be given the opportunity to form trade unions.
BGMEA vice-president Shahid Ullah Azim said about trade unions, "Bangladesh is lacking in this one thing, trade union in every factory."
"Actually we have a bitter experience with the jute industry. The industry was destroyed because of the trade union. Even then it happened in many factories. Now we don't stop. The US wants to make it mandatory. It can be discussed."
However, the labor leaders emphasized that the investigation of the United States, Bangladesh's largest buyer in the garment sector, should not be used as a political tool for the workers. Jolly Talukdar, general secretary of the Garments Sramik Trade Union Centre, said, "If this investigation is to use the workers as a tool to solve a political problem, it will be bad."
"Workers cannot be used as political tools. Buyer countries consider the specific wages of our workers, but do not raise prices for clothing. Trade unions, wages, working environment, safety are all interrelated. As a result, if one is less, the other threatens", said Jolly Talukdar.
Why is the export of clothing in the United States decreased?
The US Department of Commerce's Office of Textiles and Apparels (OTEXA) reveals how much a country exports to the United States in terms of dollars.
According to the organization, in the year 2022, the country made clothes from Bangladesh worth 9.72 billion dollars. Which is 50 percent more than the previous year i.e. 2021. But it was precisely post-Covid-19 that exports were lower in 2021.
But in 2022, the export was 9.72 billion dollars, but in 2023, it did not increase but decreased. Exports in 2023 are 7.29 billion dollars. Therefore, exports decreased by almost two and a half billion dollars or 25 percent in one year.
BGMEA President Farooq Hasan thinks that the export of clothes from Bangladesh to the United States has decreased, but this is not the case. He said, "The fact that the export to the United States has decreased is not that it has decreased from Bangladesh. Rather, it has happened because their imports have decreased.”
“Because last year and the year before, interest rates have gone up all over the world due to high inflation. As a result, mortgages have also increased. Their purchasing power has gone down.” However, Mr. expressed hope that the export situation will be better this year. Hassan
He said, “Exports have been good in January-March. Inflation has come down a lot now, so we expect interest rates to be cut all over the world from next May or June. Then mortgages will come down, affordability will go up.”
“It is true that our exports to the USA have decreased, but the USA itself has decreased its imports. They are in this situation from all over the world, it is not only for Bangladesh!", said Mr. Hasan.
“Because last year and the year before, interest rates have gone up all over the world due to high inflation. As a result, mortgages have also increased. Their purchasing power has gone down.” However, Mr. expressed hope that the export situation will be better this year. Hassan
He said, “Exports have been good in January-March. Inflation has come down a lot now, so we expect interest rates to be cut all over the world from next May or June. Then mortgages will come down, affordability will go up.”
“It is true that our exports to the USA have decreased, but the USA itself has decreased its imports. They are in this situation from all over the world, it is not only for Bangladesh!", said Mr. Hasan.
Workers' agitations for various demands, including wage hikes, turned violent last year
The matter of investigation came in the context, last year the labor unions had given an ultimatum till November 15 to re-fix the wages of workers in the garment sector made in Bangladesh. At that time, the United States reacted strongly to the death of Russell Hawladar, a member of the Garment Workers Federation and a worker who participated in the movement.
State Department spokesman Matthew Miller expressed concern over the crackdown on workers and trade unions.
Matthew Miller's statement called on the government to ensure that workers are able to exercise their right to freedom of association and bargaining without the threat of violence, retaliation or intimidation.
Then on December 8, US Ambassador Peter Haas mentioned the rights of workers in the garment sector as a priority for the US at an event in Tejgaon, Dhaka. He also talked about wages to improve the quality of life of workers.
In the meantime, on November 13, the government published a gazette fixing the minimum wage of garment workers at twelve and a half thousand rupees. Which is said to be effective from 1st December.
At the same time, the foreign minister of the country, Anthony Blinken, announced the global labor policy on behalf of US President Joe Biden in the middle of November last year. He said the United States would impose trade and other sanctions on those around the world who exploit, intimidate and attack workers' rights.
In the meantime, top officials including Afrin Akhtar, Deputy Assistant Secretary for South and Central Asian Affairs of the US State Department, came to Bangladesh for a three-day visit in February.
During this time, they also met with the leaders of various political organizations and prominent people.
In that meeting, they discussed various issues including Bangladesh labor law, trade union, work environment.
For a long time, the United States has been expressing concern about the labor situation in Bangladesh, including the quality of life of workers.
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