The United States Senate confirmed Peter Haas as Ambassador to the People’s Republic of Bangladesh on December 18, 2021. Mr. Haas, a career member of the Senior Foreign Service class of Minister-Counselor, previously served as Acting Assistant Secretary and concurrently as Principal Deputy Assistant Secretary in the Bureau of Economic and Business Affairs. He also previously served as Deputy Assistant Secretary for Trade Policy and Negotiations. Mr. Haas shared his views on indifferent issues in a conversation with team Textile Focus. Key discussion points are mentioned below for our readers-
Q. How do you see the economic growth of Bangladesh, and what is your observation regarding the contribution of the textile and apparel industry to the country’s economy?
Peter Haas: Bangladesh’s economic growth has been truly extraordinary. In just the past 20 years, the number of people living below the national poverty line in the country has been cut in half, which equates
to roughly 40 million people rising out of poverty. Bangladesh is scheduled to graduate from Least Developed Country status in 2026 and is progressing toward becoming a middle-income country. We celebrate your successes and will continue to work with your government to expand economic trade and cooperation. Bangladesh is an important trade partner. The United States is the top destination for Bangladeshi ready-made garments. We would love to be able to send more of our American goods to Bangladesh.
The textile and apparel industries are an important part of Bangladesh’s economy. U.S. companies have invested $4.3 billion in Bangladesh over time and were the leading source of direct investment in 2021. Bangladesh is on the radar of even more U.S. businesses looking to expand in the region.
Q. The Bangladesh apparel industry is the second largest in the world. What are the opportunities you see for the United States in bilateral trade with Bangladesh in terms of raw material (fiber, machines, chemical) export?
Peter Haas: I am pleased demand is growing for U.S. cotton in Bangladesh’s expanding garment industry as producers recognize its high quality and reliability. Our market share will keep growing because U.S. industry is continuously innovating to serve its customers better, both in Bangladesh and around the globe. The United States produces the best cotton in the world, and I think your readers can attest to this.
Q. Bangladesh imported one million bales of cotton from the United States in the last fiscal year. How do you evaluate this?
Peter Haas: Bangladesh is a top-five export market for U.S. cotton and the United States captured approximately 10 percent of the market share last year. However, we would always like to sell more high-quality cotton to Bangladesh.
Sustainability is one area that has great potential to expand our exports. Consumers worldwide are, rightfully, more focused on sustainability, with a new generation of consumers prioritizing the environmental impact of their choices.
The United States is at the forefront of growing climate-smart commodities. Climate-smart commodities are any agricultural commodities produced using agricultural practices that reduce greenhouse gas emissions or sequester carbon. Recently, the U.S. Department of Agriculture announced $2.8 billion in funding to support innovation in this sector, with $90 million allocated to the U.S. Climate Smart Cotton Program. Last year, the United States also introduced the U.S. Cotton Trust Protocol. The Trust Protocol increases transparency along the supply chain and is aligned with the United Nations’ Sustainable Development Goals. This means that using U.S. cotton as input is better for the planet and better for your business.
Q. The majority of U.S. imports from Bangladesh are apparel products. How can Bangladesh further boost its exports to the United States?
Peter Haas: The United States is a top destination for Bangladeshi readymade garment exports, and we are looking to grow our trade with Bangladesh even more. The trade between the two countries has reached over $10 billion annually.
I think expanding trade is our best opportunity to deepen the relationship between the United States and Bangladesh. As the largest source of foreign direct investment in Bangladesh, American companies have long seen the benefits of investing here. With Bangladesh’s impressive and steady economic growth and development, American companies are closely looking at investing even more. We continue to work with the Bangladeshi government to make their markets even more attractive to foreign direct investment.
The recently formed U.S.-Bangladesh Business Council’s diversified composition and expansive engagements demonstrate that American companies are poised to invest in Bangladesh across various sectors. American companies recognize the need for more investments in energy, including in sustainable energy, as well as in the digital economy, agriculture, education, health, and light industry sectors.
Bangladesh’s success in the readymade garment industry will also help Bangladesh play a role in becoming a key player in the global supply chain, in which priority is being placed on supply chains that are diversified, secure, and reliable.
Q. Bangladeshi textile and apparel manufacturers struggle with profitability, mainly due to lower prices from brands. Do you think manufacturing can be sustainable with the current prices brands offer to Bangladesh?
Peter Haas: Yes, I think manufacturing can be sustainable because Bangladesh has a robust and well-integrated garment industry. While the global economic outlook is difficult, many of the companies in Bangladesh have been stress-tested in previous years and know how to negotiate the current climate. But it is also important to consider diversifying the economy so that Bangladesh becomes resilient to economic shocks in the textile industry.
COVID-19 had a strong adverse impact on Bangladesh, including the ready-made garment industry. Continued efforts to diversify Bangladesh’s economy and diversify within the ready-made garment sector will serve to make Bangladesh more resilient to such shocks in the future.
Q. We know the United States is involved with many development projects in Bangladesh. Could you please share the projects related to the textile and apparel industry?
Peter Haas: Through the U.S. Agency for International Development’s (USAID) five-year, $6.8 million Workers’ Empowerment and Participation Project, the United States is supporting improvements in labor conditions in the ready-made garment industry and the shrimp and fish processing sector by strengthening the ability of independent workers’ organizations to advocate for their rights and interests—both inside the factory and within their communities. This project supports forming independent workers’ organizations and strengthens their capacity to defend their rights and collectively negotiate with employers.
Another USAID-funded project specifically helps women ready-made garment factory workers expand their core professional skills, giving them better opportunities to assume leadership positions in this industry.
The United States also sponsors the Bangladesh Trade Facilitation Project. It uses a holistic approach to help the Bangladeshi government simplify, harmonize, and modernize its trading systems for agricultural goods and food products. The U.S. government provides expert advice in technical areas building market systems for Bangladeshi goods and improving the trade systems and business enabling environment. This will lead to even stronger economic and business ties with American companies and stimulate export growth.
In addition, our private sector also helps Bangladeshi companies. For example, Cotton Council International can help textile companies become more profitable through technical consultations. And as the economy expands, I expect our business-to-business ties to expand, too. U.S. companies are the best and most responsive in the world to the needs of our customers.
Q. What are the challenges of bilateral trade between the two countries? How will they be overcome?
Peter Haas: While we have had great success in integrating our economies, our two countries have occasional regulatory disagreements. As always, we work together to find solutions beneficial to both countries, such as what we are doing now for the long-standing and unnecessary fumigation on-arrival requirement for U.S.-sourced cotton. As your readers know removing this trade barrier not only benefits the United States but also better ensures a cost-effective and steady supply of U.S. cotton for the Bangladeshi apparel industry, which accounts for over 85 percent of Bangladesh’s exports. I am extremely pleased by the Bangladeshi government’s indication to solve this issue by the end of the year, ensuring that adopted measures are science-based. I know that all of you would like to see this resolved too.
This is just one example of how we can work together to facilitate trade. Additionally, potential investors examine the business climate, and Bangladesh must frequently compete with countries where the business climate is more welcoming. As Bangladesh further develops a skilled workforce whose rights are protected, builds a legislative framework that supports business, enforces intellectual property laws, and eliminates the hidden taxes of corruption and needless bureaucracy, more companies will look to invest in Bangladesh, which will increase bilateral trade.
