Textile millers in Bangladesh have called for clear guidelines on certain provisions of the country’s trade agreement with the US, particularly its conditional zero reciprocal tariff facility, as recent developments could significantly impact the deal.
The agreement signed on 9 February stipulated that textile and apparel exports to the US made using imported American cotton and manmade fibre would enjoy duty-free access to the market.
The BTMA previously said this framework could significantly enhance Bangladesh’s competitiveness in US apparel imports.
However, there remains a degree of ambiguity over how the zero reciprocal tariff facility will be operationalised, said Rajib Haider, a former director of the BTMA.
Against this backdrop, the association asked the National Cotton Council of America (NCCA) for clarification in this regard.
“But to my knowledge, we have yet to receive any response,” he added.
Besides, the US Supreme Court recently ruled that tariff structure was not maintainable, prompting the Trump administration to later announce a revised 10 per cent universal tariff.
As such, the BTMA is now unsure of its implications.
The country’s apparel exports to the US are primarily produced using three types of yarn, namely 100 per cent cotton, blended yarn and denim yarn.
While there are no major concerns regarding 100 per cent cotton yarn, the BTMA sought specific guidance on the eligibility of synthetic fibre components used in blended yarn.
In the case of denim yarn, which often uses recycled or waste cotton alongside virgin cotton, the association said ensuring traceability of recycled inputs is practically complex.
Therefore, the BTMA requested consideration of policy flexibility for this segment.
The BTMA also asked for clarity on the possible “cap” mechanism under the agreement.
Based on industry experience, $1 worth of cotton typically translates into $5 to $6 in free-on-board value of exported garments.
The association has proposed that the cap be set at five to six times the value of imported cotton to reflect value addition across the supply chain.
Furthermore, it sought clarification on whether the cap would be administered nationally on a first-come, first-served basis or directly linked to company-level cotton imports.
To ensure compliance, the BTMA recommended engaging a credible non-profit company for certification and traceability, noting that existing cotton traceability data could serve as a foundation.
It also proposed a temporary transitional arrangement during the initial phase of implementation, considering the time required to establish a robust traceability system.
Additionally, the association asked whether products made using US cotton blended with non-American yarn would qualify for the zero-tariff benefit.
According to the BTMA, its 1,873 member mills engaged in spinning, weaving, dyeing, printing and finishing operations represent investments of more than $23 billion and form a core pillar of Bangladesh’s industrial and export base.
In 2025, about 10 per cent of Bangladesh’s total cotton imports came from the US.
The association believes this share could increase four to fivefold in the short term if the agreement is effectively implemented.
At full production capacity, Bangladesh requires roughly 16 million bales of raw cotton annually, compared to an effective current demand of around 8 million bales.
The BTMA said successful execution of the agreement would strengthen Bangladesh’s competitiveness in the US, expand sourcing opportunities for American retailers and create a stable, growing market for US cotton producers.
To advance constructive dialogue on the deal’s implementation, the association sought the NCCA’s cooperation and announced plans to send a delegation to the US to consult public and private stakeholders.
