Important News

United States and Bangladesh Agree Framework for Reciprocal Trade Pact

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Key takeaways

  • The United States and Bangladesh have agreed to an Agreement on Reciprocal Trade to expand bilateral market access and build on the 2013 TICFA.
  • The U.S. will cut the reciprocal tariff rate to 19% on Bangladeshi-origin goods and designate some products for a zero percent tariff under specified annexes and executive orders.
  • A mechanism will allow a specified volume of Bangladeshi textile and apparel imports to enter the U.S. at a zero reciprocal tariff, linked to U.S. exports of textile inputs.
  • Bangladesh agrees to provide preferential access for many U.S. industrial and agricultural goods and to accept several U.S. regulatory standards (e.g., FMVSS, FDA certificates).
  • Bangladesh commits to reforms on labor rights, environmental protections, anti-corruption, data transfer, customs digitalization, and stronger IP protection including geographical indications provisions.
  • The U.S. may use EXIM Bank and the U.S. International Development Finance Corporation to consider supporting investment financing in critical Bangladeshi sectors.
  • Both countries noted commercial deals including ~$3.5 billion in U.S. agricultural purchases and an estimated $15 billion in energy purchases over 15 years.

Follow Up Questions

What is the timeline for finalizing and implementing the Agreement in each country?Expand

The joint statement gives no fixed dates. It says both governments “will promptly finalize the Agreement” and “undertake domestic formalities in advance of the Agreement entering into force.” In U.S. practice the Secretary of Commerce and USTR must determine and take actions to implement a framework/final agreement (including HTSUS/CBP changes), so U.S. implementation timing depends on those agencies and domestic procedures; Bangladesh’s timing depends on its own internal procedures. (No country‑by‑country calendar was published in the joint statement.)

Which specific products are identified to receive a zero percent reciprocal tariff under Annex III and Executive Order 14346?Expand

The joint statement does not list specific zero‑tariff products for Bangladesh. It says the U.S. will select items from Annex III to Executive Order 14346 (the “Potential Tariff Adjustments for Aligned Partners” list) to receive a zero reciprocal tariff; Annex III covers many HTS codes (agricultural items, certain aircraft and parts, pharmaceutical inputs, goods not sufficiently produced in the U.S.). The Agreement did not publish which Annex III lines will be granted zero treatment for Bangladesh.

How will the textile/apparel volume mechanism be calculated and enforced (what counts as qualifying U.S. textile exports)?Expand

The statement ties the zero‑tariff textile/apparel volume to a to‑be‑specified volume “determined in relation to the quantity of exports of textiles, e.g. U.S. produced cotton and man‑made fiber textile inputs, from the United States.” It does not define the precise formula or enforcement procedures; those details will be set in the implementing texts and by U.S. agencies (Commerce/USTR and CBP) when they modify HTSUS/entry procedures.

What monitoring, dispute settlement, or enforcement mechanisms will ensure Bangladesh meets labor, environmental, and anti-corruption commitments?Expand

The joint statement lists commitments (labor rights, environmental protection, anti‑corruption) but does not set specific monitoring or dispute‑settlement text. It says the Agreement will be finalized consistent with domestic procedures; EO 14346 assigns monitoring roles to the Secretary of Commerce and the USTR (they must monitor conditions and advise the President). Therefore enforcement/monitoring mechanisms and any dispute‑settlement procedures are to be defined in the final implementing agreement and by the responsible U.S. agencies — the joint statement itself provides no detailed enforcement mechanism.

Under what conditions would EXIM Bank or the DFC provide financing, and which projects or sectors are eligible?Expand

The statement says the U.S. “shall work through its U.S. institutions such as the Export‑Import Bank (EXIM) and the U.S. International Development Finance Corporation (DFC), if eligible, to consider supporting investment financing in critical sectors in Bangladesh, consistent with applicable law.” That means financing is conditional on each institutions statutory and policy criteria (country eligibility, project creditworthiness, development impact, U.S. content or export nexus for EXIM, environmental/social safeguards for DFC). The joint statement does not name specific projects; sectorally it signals "critical sectors" (e.g., energy, ICT, manufacturing) but eligibility and terms will follow EXIM/DFC rules. For program details see EXIM and DFC eligibility and policy pages.

How will the data transfer and customs digitalization commitments affect cross-border data flows and privacy safeguards?Expand

The statement commits Bangladesh to permit "the free transfer of data across trusted borders" and to "digitalize its customs procedures," but it gives no technical text or privacy safeguards. How cross‑border data flows and privacy protections will be implemented or enforced is not specified; those details are expected to be set in the final Agreement and implementing regulations. U.S. agency action (e.g., Commerce/USTR) and Bangladesh law/regulation will determine specific safeguards and customs digitalization timelines.

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