SOHEL PARVEZ

Bangladesh’s high tariff rates, investment hurdles, corruption, and bribery continue to disadvantage American firms and dampen bilateral trade prospects, according to the latest report by the US Trade Representative (USTR) on foreign trade barriers.

The 2025 report on foreign trade barriers, released last month, is also critical of Bangladesh’s data localisation efforts and restrictive digital laws, which could stifle cross-border digital trade.

The report, which highlights significant foreign barriers to US exports, foreign direct investment, and US electronic commerce, was released before the Trump administration slapped tariffs on imports from 60 countries, including Bangladesh, to reduce its trade deficit.

In the case of Bangladeshi goods entering the American market, the US authorities have imposed a 37 percent tariff, which has raised concerns among garment and other exporters, since the US is the single biggest market for local manufacturers.

The US exported $2.2 billion of goods to Bangladesh and imported $8.3 billion in 2024, with trade highly favouring Bangladesh.

The USTR report said Bangladesh’s average Most-Favored-Nation (MFN) tariff rate was 14.1 percent in 2023. Of that, Bangladesh’s average MFN applied tariff rate was 17.7 percent for agricultural products and 13.5 percent for non-agricultural products in 2023.

Bangladesh has bound 17.6 percent of its tariff lines in the World Trade Organization (WTO), with an average bound rate of 155.1 percent.

Apart from this, there are non-tariff barriers related to customs and trade facilitation.

Bangladesh ratified the WTO Trade Facilitation Agreement (TFA) in 2016 but has not submitted the required transparency notifications on import, export, and transit regulations.

These notifications were due to the WTO on December 31, 2023, it said, adding that the country has not notified its customs valuation legislation to the WTO.

Investment Barriers

The USTR report said Bangladesh allows 100 percent foreign ownership in most sectors but imposes equity caps in areas like petroleum, gas, and telecoms.

Investors in 22 sectors require no-objection certificates from relevant ministries. Though profit repatriation is permitted, US investors report delays and non-transparent processes, sometimes exceeding a year.

US companies also face delays in securing approvals for remittances, said the report, adding that the interim government agreed to formal repayment arrangements with US firms and pledged to improve repatriation procedures.

Government Procurement

The US authorities, citing government procurement, said although Bangladesh supports international competitive bidding, corruption is widespread.

“Bangladesh has launched a national electronic government procurement portal, but US stakeholders have raised concerns about the use of outdated technical specifications, the structuring of specifications to favour preferred bidders, and a lack of overall transparency in public tenders.”