Bangladesh Apparel Gets Lower Prices in US than EU

Bangladesh’s apparel exporters earn on average about 10 percent lower prices in the United States market than in the European Union, mainly due to the absence of duty-free access in the US, according to a recent study.

The findings were presented at a consultation programme held at the Department of Development Studies conference room on Saturday.

The research analysed around 25 million export records from the ASYCUDA World customs database, covering the period between 2010 and 2023.

Presenting the keynote, Jillur Rahman said exporters often receive lower prices in the US market because higher tariffs force them to absorb part of the cost within their profit margins to remain competitive.

He noted that exporters charge more than 10 percent lower prices on average in the US market compared with the EU.

The study was conducted by Research and Policy Integration for Development, which examined export prices of 10 major apparel products across the two markets.

According to the analysis, garment prices in the EU were found to be between 5 percent and 18 percent higher than those in the United States.

For example, Bangladeshi exporters receive around 20 to 27 percent higher prices for T-shirts in Germany compared with the US market. Trousers also fetch about 9 to 15 percent higher prices in Germany than in the United States.

One key reason behind this gap is preferential market access in Europe. Bangladesh enjoys duty-free entry to the EU under the Everything But Arms facility as a least developed country. The EU also offers relatively flexible rules of origin for garments.

In contrast, Bangladeshi apparel exports to the United States face tariffs ranging from 12 percent to 15 percent.

Together, the EU’s 27 member states and the United States account for about 66 percent of Bangladesh’s total apparel exports.

The study also highlighted a wide price gap between large and small exporters. Large firms receive between 30 percent and 35 percent higher prices than small and medium-sized exporters in both markets.

Researchers said this difference reflects stronger bargaining power, better product quality and stronger relationships with high-value international buyers.

The report noted that the advantage linked to firm size appears to be more pronounced in the US market than in the EU.

It also found that exporters specialising mainly in knitwear products tend to receive 10 percent to 13 percent lower average prices, indicating comparatively lower price levels for knitwear items.

Researchers suggested that improved trade access and stronger market positioning could help Bangladeshi exporters secure better prices in global markets.