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The President's Trip to South Asia
U.S. ECONOMIC RELATIONS WITH BANGLADESH
U.S. economic relations with Bangladesh center on U.S. investment in the energy and power sector, as well as large U.S. imports of Bangladeshi ready-made garments.
The U.S. is Bangladesh’s largest single official trading partner. Leading U.S. exports to Bangladesh over the years have been wheat and cotton, followed by capital goods, computers, and consumer items.
NATURAL GAS AND ENERGY
U.S. investment in Bangladesh has risen from $25 million to more than $750 million in the past four years. This investment is overwhelmingly in the natural gas and private power generation sectors, led by UNOCAL, El Paso/Ogden, Halliburton, and AES.
Other American companies – including Chevron, Texaco – are ready to provide further capital and expertise to develop Bangladesh’s energy sector, if markets for expanded gas production can be identified and contracts finalized, and if a suitable framework is put in place to provide legal protection for private investment.
In recognition of the importance of greater private investment in energy in Bangladesh, USAID will launch the $50 million South Asia Regional Initiative (SARI) to help Bangladesh build the policy framework and cross-border private-sector linkages for regional energy cooperation.
Bangladesh has proven natural gas reserves of 10.2 trillion cubic feet, equal to 30 years of consumption at current rates. Some energy companies believe that Bangladesh could have more than 40 trillion cubic feet of gas (equivalent to the reserves of Norway or Libya). Such a large resource base could allow Bangladesh to fuel its own development by exporting gas via pipeline to the gas-hungry Indian market. However, there is currently strong political opposition to such exports from all political parties. The government prefers the idea of exporting power or products from gas-based industries.
Bangladesh’s main seaport, Chittagong, is among the most inefficient and expensive in Asia . Seattle-based Stevedoring Services of America (SSA) is negotiating with the Government of Bangladesh on a $438 million project to construct an integrated container Terminal Project.
Bangladesh exports to the U.S. have increased 64 percent in value and 87 percent in volume since the Uruguay Round’s Agreement on Textiles and Clothing went into effect in 1995. Textile exports to the U.S. accounted for 90 percent of Bangladesh’s total 1999 exports to the U.S. of $1.9 billion.
Bangladesh has been pressing for increased access to the U.S. apparel market before all quotas end in January 2005. The U.S. has taken the position that no discussion of a quota increase can take place unless Bangladesh allows the right of collective bargaining to workers in industries located inside Bangladesh’s export processing zones.
In the financial sector, American companies Citigroup, American Express, and the AIG have been active in Bangladesh for years.