U.S.-BANGLADESH RELATIONS

Although the U.S. relationship with Bangladesh was initially troubled because of strong U.S. ties with Pakistan, U.S.-Bangladesh friendship and support developed quickly following Bangladesh's independence from Pakistan in 1971.

U.S.-Bangladesh relations are excellent. These relations were boosted in March 2000 when President Clinton visited Bangladesh, the first-ever visit by a sitting U.S. President, when Secretary of State Colin Powell visited in June 2003, as well as when Secretary of Defense Donald Rumsfeld visited in June 2004. A centerpiece of the bilateral relationship is a large U.S. aid program, totaling about $110 million for fiscal year 2008. U.S. economic and food aid programs, which began as emergency relief following the 1971 war for independence, now concentrate on long-term development. U.S. assistance objectives include stabilizing population growth, protecting human health, encouraging broad-based economic growth, and building democracy. In total, the United States has provided more than $4.3 billion in food and development assistance to Bangladesh. Food aid under Titles I, II, and III of PL-480 (congressional "food-for-peace" legislation) has been designed to help Bangladesh meet minimum food requirements, promote food production, and moderate fluctuation in consumer prices. Other U.S. development assistance emphasizes family planning and health, agricultural development, and rural employment. The United States works with other donors and the Bangladesh Government to avoid duplication and ensure that resources are used to maximum benefit.

Since 1986, with the exception of 1988-89, when an aircraft purchase made the trade balance even, the U.S. trade balance with Bangladesh has been negative, due largely to growing imports of readymade garments. Jute carpet backing is the other major U.S. import from Bangladesh. Total imports from Bangladesh were about $2.6 billion (excluding services) in FY 2005, up from $2.1 billion in 2002. In 2007 total imports reached $3.4 billion. U.S. exports to Bangladesh (some $333 million--excluding services--in 2005, and $456 million in 2007) include wheat, fertilizer, cotton, communications equipment, aircraft, and medical supplies, a portion of which is financed by the U.S. Agency for International Development (USAID). A bilateral investment treaty was signed in 1989.

Another trade related issue between the two countries involves the export processing zones (EPZs). The government provides several tax, foreign exchange, customs and labor incentives to investors in the EPZs. One such incentive provided in recent years was an exemption from certain labor laws, which had the practical effect of prohibiting trade unions from the zones. The U.S. Generalized System of Preferences (GSP) law requires the beneficiary country to satisfy certain conditions relating to labor rights. On July 13, 2004, the government passed a bill allowing limited trade unionism in the EPZs effective November 1, 2006. Implementation of the law has been slow, however, and a U.S. labor organization has filed a petition with the U.S. Government to suspend Bangladesh's GSP privileges in the absence of progress on labor rights issues.

Relations between Bangladesh and the United States were further strengthened by the participation of Bangladesh troops in the 1991 Gulf war coalition, and alongside U.S. forces in numerous UN peacekeeping operations, including Haiti in 1994, as well as by the assistance of a U.S. naval task force after a disastrous March 1991 cyclone in Bangladesh. The relief efforts of U.S. troops are credited with having saved as many as 200,000 lives. In response to Bangladesh's worst flooding of the century in 1998, the United States donated 700,000 metric tons of food grains, helping to mitigate shortages. In July 2006, the U.S. Navy's hospital ship Mercy visited Bangladesh and U.S. personnel worked with Bangladeshi medical personnel to provide medical treatment to Bangladeshi patients. Between 2005 and 2008, the United States obligated $2.2 million in grant aid funding (Foreign Military Financing) to purchase Defender class small boats for the Coast Guard of Bangladesh, and allocated $934,000 in IMET (International Military Education and Training) for 2007. In addition to heavy flooding at the end of summer 2007, Cyclone Sidr hit the country on November 15, causing widespread devastation and affecting the lives of millions of people. Following the cyclone, U.S. troops and two U.S. naval vessels assisted in the delivery of relief supplies to cyclone victims. USAID provided approximately $36.5 million in food and relief items to Cyclone Sidr-affected people and has continued its support through rebuilding houses for people in the cyclone-affected areas. An additional $80 million will be provided to rebuild livelihoods, strengthen local government, generate economic recovery through income-generation activities, and to plan and construct cyclone shelters in the disaster-prone areas.

Additionally, Bangladesh has become a valuable United States ally in our global efforts to defeat terrorism. As part of these efforts, the Government of Bangladesh has begun to address problems of money laundering and weak border controls to ensure that Bangladesh does not become a terrorist safe-haven.