The United States of America and the People’s Republic of Bangladesh have taken a significant step toward bolstering their economic ties by entering into a new Agreement on Reciprocal Trade. This agreement promises to grant exporters from both nations unprecedented access to each other’s markets, marking a new chapter in their longstanding economic relationship that began to formalize with the U.S.-Bangladesh Trade and Investment Cooperation Forum Agreement (TIFCA) in 2013.
Highlights of the Agreement include:
- Bangladesh has pledged to offer substantial preferential market access for various U.S. industrial and agricultural products. These include a diverse range of goods, from chemicals and medical devices to machinery, vehicles, and agricultural products like soy, dairy, beef, poultry, and tree nuts.
- The United States will reduce the reciprocal tariff rate for Bangladeshi goods, initially set at 19 percent as per Executive Order 14257 from April 2, 2025. Additionally, specific products listed in Annex III of Executive Order 14346 may be eligible for a zero percent tariff rate.
- A mechanism will be established to allow certain textile and apparel imports from Bangladesh to benefit from a zero reciprocal tariff rate, contingent upon the volume of U.S. textile exports, such as cotton and man-made fiber inputs.
- Both countries agree to tackle non-tariff barriers affecting trade and investment, with Bangladesh committing to adopt U.S. safety and emissions standards for vehicles, accept FDA certifications for medical devices, and remove restrictions on U.S. remanufactured goods.
- Bangladesh will also facilitate the free flow of data across borders, support a moratorium on customs duties related to electronic transmissions, and enhance its customs procedures while aligning with international standards for food safety.
- In terms of labor rights, Bangladesh is committed to protecting internationally recognized labor standards. This includes banning the importation of goods produced through forced labor and ensuring workers’ rights to form associations and bargain collectively.
- Bangladesh will maintain strong environmental protections and enforce its environmental laws, while also working to improve trade practices and mitigate distortions caused by state-owned enterprises.
- On the intellectual property front, Bangladesh will bolster protections by ratifying international treaties and implementing provisions aimed at safeguarding U.S. products, particularly in the cheese and meat sectors.
- Both nations are committed to enhancing economic and national security cooperation, focusing on resilient supply chains and combating unfair trade practices globally, including duty evasion and sharing investment information.
- Bangladesh has also agreed to strengthen its anti-corruption laws, a critical step toward fostering a fair business environment.
- The United States, through institutions such as the Export-Import Bank and the U.S. International Development Finance Corporation, will explore investment financing opportunities in Bangladesh’s key sectors, in collaboration with U.S. private enterprises.
- Recent and forthcoming commercial agreements in agriculture, energy, and technology include:
- The procurement of aircraft.
- Purchasing approximately $3.5 billion in U.S. agricultural products like wheat, soy, cotton, and corn.
- Acquiring energy products worth an estimated $15 billion over the next 15 years.
- Both the United States and Bangladesh will move swiftly to finalize this Agreement on Reciprocal Trade, ensuring that all domestic formalities are completed before its enactment.
