SATV, Kathmandu, Mar. 13 - The US has launched a fresh trade investigation into Bangladesh and more than a dozen other economies to examine whether their policies and production practices are contributing to global overcapacity that could harm American manufacturing.
The investigation was initiated on March 11 by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974, a powerful trade enforcement tool used to challenge what Washington considers unfair foreign practices.
The exercise will determine whether the acts, policies and practices in China, the EU, India, Bangladesh, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Mexico and Japan are “unreasonable or discriminatory and burden or restrict US commerce”.
Evidence of structural excess capacity and production exists in Bangladesh, which has a goods trade surplus of $6.15 billion with the US, the USTR said.
The bilateral surplus is led by exports in the textiles sector, with the government providing cash incentives for exports across 43 sectors, including domestic textiles and leather products.
Besides, Bangladesh’s cement industry has significant excess capacity amid the industry’s worst downturn in years, the USTR said.
In 2024, Bangladesh’s national consumption of cement dropped to 38 million tonnes, which is less than 40 percent of total capacity, and it declined further the following year, the USTR added.
“It is not a comforting sight to see the country’s name in the list for investigation,” said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association.
But, the subject matters that will be investigated -- such as production capacity, intellectual property rights and incentives -- are unlikely to affect Bangladesh to any great extent.
For instance, Bangladesh’s production is based on receiving work orders from international buyers, so excessive production is not possible.
Moreover, Bangladesh has already amended the labour law last year as per the recommendations of the International Labour Organisation (ILO) and ratified three important ILO Conventions, making it the only country in South Asia to ratify all 10 fundamental ILO conventions.
The government has also already started phasing out incentives on export receipts as part of the preparations for smooth graduation from the least-developed country (LDC) bracket in November this year.
Regarding intellectual property rights, Bangladesh does not produce counterfeit goods to injure the market of other countries, so the investigation might not be a problem.
“We are prepared to face the investigation,” he said, adding that such investigations were conducted earlier as well.
But, Bangladesh will have to maintain regular dialogue with the US so that the investigation process is not misunderstood or Bangladesh is not wrongly presented to the US in any way, he added.
Commerce Secretary Mahbubur Rahman said his ministry received a letter from the USTR in this regard. “We will take necessary action as per the outcomes of the investigation,” he added.
It is not possible to conduct a concrete investigation and such investigations are rarely objective, said Mohammad Abdur Razzaque, also chairman of the Research and Policy Integration for Development.
For instance, Bangladeshi garment exporters send goods to the US upon receiving work orders from American retailers, brands and vendors, so excessive production is not possible, he added.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, welcomed the investigation.
“We do not have any objection to conducting the investigation. We also want the business to be conducted in a transparent way,” he added.
