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US to Investigate Unhealthy Garment Pricing Competition

The United States International Trade Commission (USITC) has set its sights on Bangladesh, probing whether recent fluctuations in garment prices hint at unfair competition practices. This development comes as the USITC observed that the prices of Bangladeshi garments surpassed the average rates paid for similar items from other countries by the US. This anomaly has prompted the agency to delve deeper, exploring potential anti-competitive maneuvers within the industry.

Background and Motivation:

The USITC, functioning as an independent and nonpartisan entity with quasi-judicial authority, plays a pivotal role in overseeing various trade-related matters. In this instance, the USITC’s attention has turned towards Bangladesh, a significant player in the global garment manufacturing landscape. Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), is slated to participate virtually in the forthcoming hearing scheduled for March 11.

Factors at Play:

Faruque Hassan elucidated that the recent uptick in garment prices can be attributed to multifaceted factors. Notably, adjustments made by American retailers and brands to offset rising raw material and shipping costs during and post the pandemic have fueled the price surge. Moreover, while Bangladesh’s unit price has seen a gradual incline since 2017, its counterparts, notably China, have witnessed a decline in their offerings. Currently, Bangladesh stands at $3.23 per unit, compared to $1.86 for China and $2.95 for Pakistan.

Challenges Faced by Bangladesh:

Bangladesh’s garment industry faces an array of challenges, ranging from geopolitical tensions to escalating raw material and operational costs. The industry has grappled with soaring production expenses, including spikes in electricity, gas, and diesel prices. Moreover, inflationary pressures have further exacerbated the situation, leading to higher costs of finance and production. Additionally, increased regulatory fees and charges have added to the burden borne by garment manufacturers.

Perspective and Outlook:

Despite the challenges, Bangladesh’s garment industry has undertaken substantial investments in infrastructure and sustainability measures. Significant sums have been allocated towards factory remediation and eco-friendly manufacturing practices, aligning with emerging due diligence requirements. Faruque Hassan urges the USITC to adopt a holistic view, considering not just cost and efficiency but also the broader challenges faced by the industry. Moreover, the absence of local raw materials and foreign direct investment warrants attention in any comprehensive assessment.

As the USITC’s investigation unfolds, stakeholders await insights into the intricate dynamics shaping garment pricing and competition. Bangladesh’s garment industry, while navigating a complex landscape, remains committed to innovation and sustainability. The outcome of the inquiry holds significance not just for Bangladesh but also for the global garment trade, underscoring the importance of fair and transparent practices in fostering a thriving industry ecosystem.

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