A reciprocal trade deal is not enough

THE latest data on United States apparel imports should serve as a timely reminder that Bangladesh’s ready-made garment (RMG) sector cannot afford complacency, reports The New Nation on Friday.

Although the overall decline in US apparel imports during the first half of 2026 reflects weaker global demand rather than a Bangladesh-specific problem, the country’s 5.75 per cent fall in exports to its largest single export market is a matter of concern.

The encouraging aspect is that Bangladesh performed better than China and India, both of which experienced much steeper declines.

Moreover, imports from Bangladesh rebounded in June, recording a 5.74 per cent year-on-year increase.

This suggests that the slowdown may not represent a long-term deterioration in competitiveness.

Nevertheless, the figures underline the vulnerability of an economy that remains heavily dependent on one industry and a limited number of export destinations.

The recently signed Agreement on Reciprocal Trade (ART) between Bangladesh and the United States offers grounds for cautious optimism.

The agreement, including a 19 per cent ceiling on reciprocal tariffs and duty-free access for garments manufactured using US cotton and synthetic fibres, provides an opportunity to strengthen bilateral trade.

However, favourable market access alone will not guarantee sustained export growth.

Bangladesh must capitalise on these advantages through greater productivity, product diversification and improved supply chain efficiency.

Equally significant is the changing competitive landscape. Cambodia, Indonesia and Vietnam have all expanded their market shares despite the overall contraction in US imports.

Their performance demonstrates that buyers continue to reward countries capable of offering competitive pricing, reliable delivery and higher value-added products.

Bangladesh must therefore accelerate investment in technology, workforce skills, compliance and innovation to preserve its competitive edge.

At the same time, policymakers should intensify efforts to diversify export markets beyond the United States and the European Union.

Expanding trade relationships with emerging markets and promoting non-cotton, man-made fibre and higher-end apparel products will reduce exposure to external shocks.

The resilience of Bangladesh’s RMG industry has been proven repeatedly over the past decades. Yet resilience alone is no longer sufficient.

Sustaining growth in an increasingly competitive global marketplace will require strategic reforms, continuous upgrading and a commitment to moving beyond low-cost manufacturing.

The latest US import figures should be viewed not merely as a setback but as a call to prepare the industry for the next phase of global competition.