The new US-Bangladesh trade deal, known as “Cotton-for-Garments,” contains several central provisions aimed at maintaining Bangladesh’s export competitiveness while adapting to stricter global trading rules.
First, the agreement offers Bangladesh tariff-free entry into US markets for certain garments provided that Bangladesh imports sufficient raw cotton and fibers from the United States. In return, Bangladesh commits to reducing reciprocal tariffs on its exports to the US by half, from 20% to 15%. The deal also requires Dhaka to modernize intellectual property protections and strengthen e-commerce frameworks to meet Western standards.
Additionally, the pact includes a pledge for Bangladesh to participate more actively in WTO reforms and to support policies favored by the United States. These terms are intended to reassure US investors of stable and predictable market access while providing Bangladesh with some breathing room as it prepares to exit its status as a Least Developed Country.