The end result remains that of a titanic US$4.5 trillion annual trade with the world, we could only capture a paltry 0.23% market share. It’s well under 1%, with the top three, Canada, Mexico and China each holding 14% of the pie.
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Bangladesh’s total trade with the United States passed the $10 billion mark in 2021, a feat we should celebrate and beat our drums as we approach 2022 which brings us to a milestone of $12 billion! First, let’s look at blockbuster ten.
Data from the United States Census Bureau tells us how we got there year after year, billion by billion.
In 2016, total trade was only $6.82 billion, that is, exports to the United States and imports from the United States combined. With increasingly high exports, the figures rose to $7.16 billion, $8.18 billion and $9.01 billion in three consecutive years. This means we could hit the $10 billion jackpot in 2020 had it not been for the pandemic.
We did pretty well. Braving the deadly disease, we exported $6.07 billion in goods, bringing total trade to $7.92 billion. And then came the 2021 lucky charm: $2.33 billion in imports plus $8.30 billion in exports brought us to $10.64 billion in total trade, an astronomical increase of 34, 31% year over year.
There is not much change in imports from the United States over the years, rather it is the steady growth of our exports that has done the trick. When new Boeings are added to our fleet, imports increase, otherwise they stay below $2 billion. The traditional biggies are seed, scrap and steel, cotton, natural gas and liquefied natural gas.
The rather fascinating fact is that not only did we maximize our export volume, but we also sprinted faster than our rivals. From America’s 54th largest merchandise trading partner in 2016, we have fallen to 45th position last year, eight notches in the space of six years, among the 232 nations and territories with which the United States has trade relations.
THE ROAD TO $12 BILLION
More good news is on the way! The first quarter of 2022 came out as the best three months in history! It is unprecedented, unparalleled and extraordinary.
These astonishing and never-before-seen figures demand unprecedented attention from all stakeholders. Monthly historical data also tells us that the year-end figure is never four times a quarter. On the contrary, 12 months in total generally see a volume greater than a quadruple of the first quarter. Put simply, we are aiming for $12 billion in total trade this year, if not more!
It has been a long climb. Having traded since independence, it took us until 1992 to reach the billion dollar mark and three more decades to hit double digits. But the indications are strong and clear that we are not going to stop there.
And, from this point of view, let’s pay tribute to both sides of the aisle, the individuals and associations that sell to the United States on one side, and the Prime Minister’s Office, the Department of Commerce, the Department of Finance , Ministry of Foreign Affairs Foreign Affairs, Bangladesh Bank, Export Promotion Bureau, National Revenue Board, Bangladesh Export Processing Zones Authority, Bangladesh Economic Zones Authority, Bangladesh Investment Development Authority and all other regulators on the other hand. Hat !
The end result, however, remains that of a titanic US$4.5 trillion annual trade with the world, we could only capture a paltry 0.23% market share. That’s well under 1%, with the top three, Canada, Mexico and China, each holding 14% of the pie.
How do we expand our share then? What can we do differently? What trades can elevate us to a 1% stake? A quick look at our export basket to the USA will tell it all.
We have exported 67 main types of products to the United States in the first nine months of the current fiscal year, but their poor composition is painful.
Knitted or crocheted and non-knitted or crocheted garments top the chart with $6.59 billion in exports, accounting for 86.53% of our total exports.
Footwear, other ready-made textiles, and headwear are the only other export items we have that could cross the $200 million mark. Travel items, artificial flowers, human hair items, furniture and mattresses are striving to make their mark.
Our exports to the United States were $7.62 billion in March, according to data from the Export Promotion Bureau.
The harsh reality is that our over-reliance on ready-to-wear is still pervasive. We’re not going to repeat the diversity prescription here because our exports to the United States are already quite diverse.
Entrepreneurs and government seem to be trying everything from pharmaceuticals to ceramics, toys and games to glass and glassware, and electrical machinery to plastics to power the target destination.
Why success is hard to come by is a debate we would spare today. It’s a time to celebrate milestones and keep our spirits up for the next nine months.
Just a quick thought if we go from here: if some of our biggest exporters in industries other than apparel had been a little more aware of the depth of the US market, it could have worked wonders. For example, fish and lobsters. For our giant fish exporters, Europe remains the comfort zone. Unfortunately, the $40 million export to the United States is largely consumed by the Bangladeshi diaspora. Thus, it can be called a pseudo export.
MYTH VS REALITY
The name America does not usually make a splash in people’s minds when it comes to inbound remittances. It is still from the Middle East that we believe that all remittances originate. But data from our central bank shows that the United States is the second largest remittance sending country after Saudi Arabia. In the last fiscal year, it was $5.72 billion and $3.46 billion, respectively.
Surprised? Then, prepare for more bumping!
When it comes to foreign direct investment, many would put China first. Many others could name Japan or Korea. The fact is that these countries are our precious partners, but not really the best if we count the stock of FDI.
The three main investing countries are the United States, the United Kingdom and the Netherlands.
Cumulative FDI inflow from the United States amounted to $4.32 billion in December 2021, out of a global total of $21.58 billion. That is, a single country invested one-fifth of total FDI from all over the world.
America leads in more than one way then!
In fiscal year 2019-2020, America regained its position as the top destination for our exports, with Germany, the United Kingdom and Spain being the next three main markets. 2020-21 followed suit. In this fiscal year, the United States is on a threefold as our biggest buyer on earth.
Let’s raise our glasses to the champion!
The author is a Fellow of the Pacific Council on International Policy and a former Trade Counselor at the Los Angeles Consulate. He can be contacted at [email protected]