The ongoing trade war between the two big economies- the USA and China, seems to be a positive development if viewed from Bangladesh’s perspective.
According to the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP), this trade war would bring in more work orders and foreign direct investment for the Bangladesh garment sector.
“Major players in the garment industry in the Asia-Pacific, such as Bangladesh and Vietnam, are expected to benefit by acquiring a larger share in exports to the US, and thus attracting more investment,” underlined the Asia-Pacific Trade and Investment Report (Aptir), unveiled recently at the UN ESCAP office in Bangkok, which added that Bangladesh’s textile and apparel sector received US$ 422 million in FDI in 2017, which is 1 per cent higher than the year earlier.
“The upward trend was recorded despite lingering concerns about the sustainability of the country’s garment sector,” the report maintained while expressing apprehensions that a prolonged trade between the two would result in an adverse impact on the Asia Pacific economy.
“The US-China trade tensions have also begun to disrupt existing supply chains and dampen investor confidence, as evidenced by the deceleration in trade growth after the first half of 2018,” the Aptir report highlighted while adding that export growth may slow to 2.3 per cent in 2019 vis-à-vis nearly 4 per cent growth in export volume in 2018 if tensions between the two continue.
Lingering of the trade war is further likely to have implications on employment with almost 9 million people running risk of losing work in the region while many more workers moving to new jobs in different sectors.
“As production shifts take place and resources are reallocated across sectors and borders due to the trade conflicts, tens of millions of workers may see their jobs displaced and be forced to seek new employment.” – Mia Mikic, Director of the Trade, Investment and Innovation Division at ESCAP