Trade agreements are instruments of leverage rather than moral documents and the proposed US–Bangladesh reciprocal trade agreement reflects that reality. Its clauses on agriculture, labour, digital trade and national security are demanding. Some are intrusive. But the correct way to judge this deal is by pure arithmetic.
Bangladesh exports roughly $55 billion in goods a year. More than 80 per cent comes from ready-made garments. The United States alone absorbs close to $9–10 billion of those exports annually, making it Bangladesh’s single largest country market.
Millions of jobs—directly and indirectly—depend on continued, stable access to American consumers. A tariff shock or loss of preferential access in that market would be measured in factory closures and pressure on foreign-exchange reserves.
Against that backdrop, the agreement’s constraints look different.
The provisions requiring Bangladesh to accept US laboratory certifications and avoid complex licensing procedures limit regulatory discretion. But they also reduce friction in bilateral trade.
Bangladesh imports several billion dollars’ worth of US goods each year, from agricultural commodities to aircraft components. Faster clearance and standardised certification lower costs. The asymmetry in trade volumes matters. Bangladesh sells far more to the US than it buys. Predictable import rules are a manageable concession in exchange for export security.
The agricultural clauses are politically sensitive. Requiring “science-based” sanitary measures and opening the door to US GMO products will intensify competition for domestic producers. Yet Bangladesh is already structurally dependent on imports in key categories.
It imports millions of tons of wheat annually and virtually all the cotton that feeds its garment sector—over 7 million bales a year. Access to reliable US supplies of wheat, soybeans and cotton strengthens input security for the very industry that sustains the economy. The pressure on farmers is real, but so is the need to secure the industrial base that employs roughly four million workers.
Labour provisions mandating easier union formation, expanded strike rights and full union freedom in export processing zones will raise compliance costs for factory owners. They also align Bangladesh more closely with the expectations of global brands and US lawmakers.
After Rana Plaza, labor conditions became inseparable from market access. Embedding labour standards in a binding trade framework reduces the risk of future sanctions, reputational damage or sudden buyer withdrawal.
Higher wages and stronger representation may compress margins, but they also stabilise production and protect long-term access to premium markets.
Environmental obligations and the requirement not to discriminate tax-wise against US firms constrain policy space. Yet Bangladesh’s development strategy depends on foreign investment in energy, infrastructure and technology. Investors prioritise regulatory predictability.
A clear commitment to non-discrimination signals that Bangladesh intends to operate within global norms. The revenue foregone by not imposing targeted digital taxes on large US firms is modest compared with the export earnings at stake in apparel.
The digital trade chapter, which prohibits customs duties on digital services and restricts data localization mandates, has drawn criticism on sovereignty grounds. But Bangladesh’s growing IT services sector and large freelance workforce depend on uninterrupted cross-border data flows.
The country is one of the world’s leading suppliers of online freelance labour. Imposing data localisation could deter cloud investment and fragment access to global platforms. Rather than seek revenue through border taxes on digital flows, Bangladesh can pursue domestic taxation within an integrated digital economy.
The most controversial elements are geopolitical. The agreement links benefits to compliance with US sanctions and discourages engagement with suppliers selling below market price—implicitly targeting China—and limits nuclear cooperation with countries deemed contrary to US interests.
Bangladesh has cultivated economic ties with China and is working with Russia on the Rooppur Nuclear Power Plant. Balancing these relationships is delicate.
But the hierarchy of dependence is clear. The US market accounts for roughly one-fifth of Bangladesh’s total exports and an even larger share of industrial value added. China and Russia are critical suppliers and financiers, but they do not absorb Bangladeshi exports at comparable scale.
Aligning trade compliance more closely with US standards reduces the risk of secondary sanctions that could disrupt dollar clearing, banking channels or export payments. For a country reliant on export receipts and remittances to stabilise its currency, that risk cannot be dismissed.
The purchase commitments—14 Boeing aircraft, $15 billion in LNG over 15 years, large volumes of wheat, soybeans and cotton—are portrayed as coerced procurement. In practice, each category corresponds to existing structural demand.
Biman Bangladesh Airlines requires fleet renewal to remain viable. Energy shortages have constrained industrial output for years; diversified LNG supply enhances resilience. Cotton and soybeans are core inputs for the garment and poultry sectors.
Structured long-term contracts may reduce price volatility and secure financing terms that would otherwise be harder to negotiate.
The enforcement clause allowing the US to reimpose tariffs if Bangladesh fails to comply underscores the power imbalance. The United States retains leverage. But that leverage exists regardless of this agreement. Formalising obligations within a negotiated framework creates clarity. For exporters, clarity is preferable to uncertainty.
Bangladesh is also approaching graduation from least-developed-country status, which will phase out certain unilateral trade preferences in other markets. The country’s competitive advantage will increasingly rest on scale, compliance and reliability rather than preferential treatment.
Securing durable access to the world’s largest consumer market mitigates the shock of that transition.
The core question is not whether the agreement is demanding. It is whether the economic gains from stable and potentially expanded access to a $25 trillion economy outweigh the costs of policy concessions and structured imports.
If even a few percentage points of tariff exposure are neutralised, the savings over a decade could amount to billions of dollars—multiples of the value of any individual procurement commitment.
Bangladesh’s economy is export-led and garment-centric. The United States is its largest customer. In that equation, market security is strategic. The agreement narrows certain policy choices, but it fortifies the foundation of the country’s industrial growth model.
For a mid-sized developing economy navigating great-power rivalry and post-LDC graduation pressures, perfection is not available. Stability is. On balance, anchoring its export future to its largest market is a rational calculation.
Faisal Mahmud is the Minister (Press) of Bangladesh High Commission in New Delhi