US-China trade war: Bangladesh apparel sector to earn more $200 million in next two year

US-China trade war: Bangladesh apparel sector to earn more $200 million in next two year

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Bangladesh’s exports earnings from the apparel sector will increase by $200 million additionally in the next two years if the international trade conflicts escalate, said Asian Development Bank (ADB).

US China trade war boost BD apparel ADB
Figure: According to the research of ADB, the apparel sector is the most potential sector to be benefited from the trade tariff tension.

In addition, the additional export earnings from the apparel sector will help to grow Bangladesh Gross Domestic Products (GDP) by 0.086% in the next two years.

Meanwhile, the overall exports of Bangladesh will fetch an additional $400 million under the escalation of trade conflicts and the GDP will grow by 0.19% in the same period.

Yasuyuki Sawada, chief Economist of ADB came up with the observation while talking at a Seminar on “Impact of Emerging International Trade Relations on Bangladesh” in Dhaka on Monday.

“US is imposing 25% tariff on $200 billion imports from China, while China is imposing trade measures on $100 billion imports from the US,” said Yasuyuki Sawada.

Under the current scenario, China’s export to the US will go down as it will lose competitiveness and the supply chain will be affected, said Sawada.



As a result, China sees the huge direct and indirect effect on trade, whereas other Asian countries including Bangladesh seems to gain out of trade redirection, he added.

In the given situation, China to lose the business of $126.4 billion and GDP can be fall by 1.03%. while Bangladesh exports to increase by $400 million and the GDP to grow by 0.19%, said Sawada in his presentation adding that Bangladesh also can gain from the regional trade, Sawada.

Of the $400 million additional export earnings, $200 million will come from the textile and garment sector, said the regional lender.

According to the research of ADB, the apparel sector is the most potential sector to be benefited from the trade tariff tension. While the leather and leather goods and ICT sector have also prospected.

“Being a garment businessman, I have realized that despite having trade barriers, the trade conflicts between the United States and China will benefit Bangladesh apparel production and exports,” Commerce Minister Tipu Munshi said. He was present as Chief Guest.

China is the largest exporter of apparel goods but I can assure that Bangladesh’s exports especially ready-made garment products will grow further, said the minister.

While lots of business can relocate to Bangladesh and other Asian countries. And for the last few months, new export orders are coming. But we shall have to follow the development in the global trade, said Tipu.

According to Otexa data, Bangladesh’s export to the US market stood at $5.20 billion, up by 5.72% in January-November of 2018. While apparel export to the US market has seen a 6% jump to $5 billion in the same period.

However, experts called for steps in tapping the opportunity from the trade tension as there are other countries, who can attract the buyer’s attention.

“The emerging trade relations could offer an opportunity for Bangladesh to increase its export and capture greater space in the global value chain. Given the demographic dividend Bangladesh enjoys, this could emerge as a sustained contributor towards creating new job opportunity for the youth, said ADB country director Manmohan Parkash.

However, this may not be easy and simple. It will hinge Bangladesh ability to align its trade investment and infrastructure with the operative principle of the global value chain, said Prakash.

A number of policy actions, incentives, and structural reforms may be needed for manufacturers to relocate in Bangladesh, he added.

The regional lender stressed on making the trade policy coherent with the value chain led to trade and providing an enabling trade infrastructure and trade regulatory framework could help.

Similarly, investing in good infrastructure, providing good logistic and easy facilitation can help develop an efficient global value chain and thereby attract global companies to move their productions centers to Bangladesh, it added.

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