Doha: Bangladesh and the United States have formally signed a comprehensive reciprocal trade agreement designed to reduce tariffs and broaden preferential market access for goods between the two nations, following nine months of negotiations that began in April 2025.

According to Qatar News Agency, the newly concluded pact stipulates that the United States will reduce its reciprocal tariff rate on Bangladeshi exports to 19%, a significant decrease from previously higher levels. The agreement also establishes a mechanism allowing certain textile and apparel products manufactured in Bangladesh using US-produced cotton and synthetic fibers to enter the US market with zero tariffs. This tariff relief is expected to benefit Bangladesh's garment sector, which constitutes more than 80% of the country's export earnings and employs millions of workers.

Muhammad Yunus, chief adviser to Bangladesh's interim government, stated that the mechanism extending zero reciprocal tariffs will be tied to the volume of US materials used in locally manufactured textile and apparel goods. This measure provides direct support to Bangladesh's export-oriented industrial base.

From the US perspective, the agreement grants expanded preferential access for American industrial and agricultural products into the Bangladeshi market. A statement from the White House highlights commitments to reduce non-tariff barriers through mutual recognition of safety and regulatory standards, the acceptance of US Food and Drug Administration (FDA) certifications, and the lifting of restrictions on re-manufactured goods.

Senior officials also emphasized that the agreement facilitates major commercial deals between the two countries, such as Bangladesh's purchase of 14 Boeing aircraft and long-term contracts for US agricultural and energy products. These agreements are valued at an estimated $3.5 billion and $15 billion, respectively, over the next 15 years.

Implementation of the agreement will occur in phases. Many agricultural and food products will see immediate tariff reductions to zero upon enactment, while other tariff cuts will be gradually introduced over the next five to ten years.

The signing of the deal is timely as Bangladesh prepares for national elections scheduled later this week, following a caretaker government that has led the country since August 2024.