Bangladesh offers to buy more US cotton and oil, CA says
Tamayo Muto, Nikkei Asia :
Threatened with a 37 per cent tariff on its exports to the U.S., Bangladesh has proposed buying more American cotton, oil and gas, and will use the offer in trade talks with the Trump administration, interim leader Muhammad Yunus told Nikkei Asia in a meeting on Thursday.
The interview was held on the sidelines of Nikkei’s annual Future of Asia conference.
Noting that U.S. President Donald Trump is aiming to reduce his country’s trade deficit with each partner, Yunus said that if the offer to buy more American commodities is accepted, Bangladesh will divert the flow of similar imports from other countries.
“For example, we buy a lot of cotton from Central Asia,” he said. “Cotton from India, cotton from many other countries. We are now looking … why don’t we buy it from the U.S., so [our] trade deficit [with the U.S.] will go down very big.”
In the fiscal year through last June, Bangladesh exported $6.8 billion worth of goods to the U.S. and imported $2.5 billion worth from the U.S. Cotton made up $361 million worth of these imports.
As a major garment maker, Bangladesh sources $7.9 billion worth of raw cotton, some of it coming from the nearby Central Asian nations of Uzbekistan and Turkmenistan. Cotton accounted for 12.5 per cent of the country’s total imports for the same fiscal year.
“Cotton producers in the U.S. become very good friends of us,” and they provide “some political access to the administration,” Yunus said.
America’s “Cotton Belt (states) elect their members of Congress, in the House [and] in the Senate, so they become our supporters,” he added.
As for energy, Bangladesh imports most of its oil from the Middle East, but Yunus said the commodity can also be purchased from the U.S.
While Yunus said he was not sure yet of the timeline of trade talks and the percentage of tariffs that can be potentially reduced, he stressed, “We see [the situation] not as a kind of a threat; we see it as an opportunity.”
The U.S. Court of International Trade on Wednesday blocked Trump’s tariffs from taking effect, ruling that the constitution gives Congress the authority to regulate commerce and that the president cannot override the legislative branch.
On the domestic front, Yunus told Nikkei that under the previous regime headed by former Prime Minister Sheikh Hasina, about $234 billion was laundered abroad from Bangladesh. He added that “$11-12 billion worth of money inside Bangladesh already [has been] identified and attached [and] frozen.”
Once Bangladesh’s current government gains access to these billions, it plans to establish two sovereign wealth funds that will pay for education and health care, and be used to “transform” the lives of the poor and help young people become entrepreneurs, Yunus said.
Last week, reports spread that Yunus had told a student leader he might step down if parties could not agree on reforms and an election timeline.
Asked if he conveyed such a sentiment, Yunus said, “I have not answered that question in Bangladesh. Since I didn’t say it in Bangladesh, if I say it in Japan, that will create a lot of trouble for me.”