'Western Validation'? Yunus Faces Backlash From Industry Bodies Over US-Bangladesh Trade Deal

Last Updated:February 15, 2026, 17:43 IST

Export-import bodies have slammed the deal as a "conditional trap" that functions more as a compliance mechanism rather than a genuine economic boost

Before he hands over reins to the BNP’s Tarique Rahman, Bangladesh interim leader Muhammad Yunus is facing severe backlash from his country’s textiles sector over a trade agreement with the United States.

The recent trade agreement between Bangladesh and the US has come under intense domestic and regional scrutiny despite being originally hailed as a landmark victory for the country’s vital textiles industry.

Export-import bodies have slammed the deal as a “conditional trap" that functions more as a compliance mechanism rather than a genuine economic boost. They have expressed growing alarm that the agreement favouring US interests could soon become a “domestic liability".

At the heart of the criticism is a “cotton clause" that industry experts said undermines Bangladesh’s economic autonomy by effectively locking its supply chain into an American agricultural ecosystem.

WHAT IS THE ‘COTTON CLAUSE’ CONTROVERSY?

While the Yunus-led government initially projected the deal as a means to provide tariff protection for garment exports, industry experts said the reality is far more restrictive.

By linking tariff relief to the mandatory use of American cotton and man-made fibre, the US has effectively inserted itself into the core of Bangladesh’s supply chain decisions. The experts warned that this is less about creating a fair trade balance and more about ensuring Bangladeshi factories serve as a guaranteed market for US raw material.

They said the deal has failed to address the most significant hurdle for exporters: high import duties. Even with full compliance, Bangladeshi garments still face the old most favoured nation (MFN) duty of approximately 16.5 percent leaving local manufacturers at a structural disadvantage compared to global competitors who enjoy preferential access.

WHAT DOES THIS MEAN?

From the point of view of Indian intelligence, Yunus has prioritised international validation and political optics over the long-term competitive advantage of Bangladesh’s manufacturers.

According to top intelligence sources, the deal allowed Yunus to project a sense of international acceptance during a period of domestic transition but did so by deferring to US commercial and geopolitical interests. This highlights a troubling absence of technical safeguards, annexes, and enforcement clarity within the deal, the sources said.

The sources told News18 that this ambiguity is viewed by some as a strategic manoeuvre by Washington, granting US authorities significant discretionary power at the implementation stage that could allow enforcement to “quietly override diplomatic intent".

Experts further said lack of definition regarding volume thresholds, verification mechanisms, and accessory coverage has left Bangladeshi exporters burdened by vague regulations and increased production costs. If technical thresholds are not met, exporters will be left exposed further squeezing already thin margins, they added.

This is in stark contrast to the interim trade agreement secured by neighbouring India, which has been described as “cleaner trade arrangements" devoid of such “raw-material strings". Unlike the Yunus-led deal, India’s approach has ensured the complete protection of its agriculture sector from American market incursions.

As competitors like Vietnam and India secure more favourable terms, there are growing fears that Bangladesh will lose its comparative advantage in the US market. Critics said the Yunus administration’s apparent willingness to defer hard details — whether due to inexperience or a desire for western approval — has placed the country’s trade-dependent economy at significant risk.

News world 'Western Validation'? Yunus Faces Backlash From Industry Bodies Over US-Bangladesh Trade Deal

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