US–Bangladesh Trade: Finance, Corruption, and Risk
This paper examines the trade relationship between the United States and Bangladesh, focusing on bilateral trade flows, the composition of exports and imports, and the significant challenges surrounding trade finance. Bangladesh is the United States' 50th-largest trade partner, with the relationship heavily weighted toward Bangladeshi textile and apparel exports. The paper identifies key obstacles to financing trade, including an underdeveloped banking sector, rampant corruption, a weak legal environment, and limited international financial institution presence. It concludes with practical recommendations for American companies seeking to operate in Bangladesh, emphasizing the importance of working with reputable international banks, local partners, and alternative dispute resolution mechanisms to manage unavoidable risks.
- US–Bangladesh Trade Overview: Bilateral trade flows, exports, and economic scale
- Financing Trade Between the US and Bangladesh: Underdeveloped finance market and key risk factors
- Corruption and Institutional Weakness: Governance scores, legitimacy deficits, and corruption
- The Role of International Financial Institutions: HSBC, ADB, and World Bank involvement in Bangladesh
- Recommendations for American Companies: Risk mitigation strategies for US firms in Bangladesh
- References: Cited sources and data references
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What makes this paper effective
- Grounds its analysis in concrete, quantified trade data — specific dollar figures, rankings, and index scores give the argument credibility and precision.
- Moves logically from descriptive trade statistics to structural analysis (corruption, legal environment, banking gaps) and then to actionable recommendations, creating a coherent analytical arc.
- Uses multiple independent indices (Heritage Foundation, Transparency International, Fund for Peace) to triangulate the risk environment rather than relying on a single source.
Key academic technique demonstrated
The paper demonstrates effective use of multi-source risk triangulation: rather than asserting that Bangladesh is a high-risk environment, it builds that case systematically by citing separate governance, corruption, and stability indices. This approach strengthens objectivity and models how applied business analysis should be evidenced.
Structure breakdown
The paper opens with a trade-flow overview establishing the bilateral relationship in quantitative terms. It then transitions into a two-part problem analysis — first diagnosing the trade finance environment, then detailing the institutional and legal obstacles. A recommendations section follows, applying the prior analysis to practical guidance for American firms. The references section closes the paper in APA style. The structure is classic problem–analysis–recommendation, well-suited to applied business or international economics coursework.
US–Bangladesh Trade Overview
The United States is the number-one export destination for Bangladesh, representing 13.9% of Bangladesh's total exports. However, the US is not among the countries from which Bangladesh primarily imports (CIA World Factbook, 2017). Total bilateral trade in 2016 was approximately $6.8 billion, of which $5.9 billion flowed from Bangladesh to the US. Imports of American goods into Bangladesh totalled just $895 million. Bangladesh is accordingly the 50th-largest trade partner of the United States (USTR, 2017).
Bangladesh's exports to the US consist primarily of woven apparel ($3.8 billion), knit apparel ($1.4 billion), other textiles ($206 million), and footwear ($105 million). The United States exports to Bangladesh include soybeans ($232 million), cotton ($95 million), corn ($39 million), and feed and fodder ($22 million). Bangladesh thus occupies an established position as a clothing and footwear-producing nation supplying the US market, while only importing relatively modest quantities of American agricultural goods. Trade with Bangladesh is estimated to support approximately 6,000 American jobs (USTR, 2017).
Financing Trade Between the US and Bangladesh
There are several critical issues with respect to financing trade between the US and Bangladesh. The Bangladeshi trade finance market is underdeveloped and is further complicated by significant corruption and a poor legal environment. The Heritage Foundation scores Bangladesh 55.0, ranking it 128th in the world on the Economic Freedom Index (Heritage.org, 2017). Several key issues were highlighted in this analysis.
Corruption and Institutional Weakness
One key issue is government integrity, on which Bangladesh scored very poorly. This measure covers problems such as corruption and inadequate government control — including questions about the state's basic legitimacy. Transparency International (2016) scored Bangladesh 26 out of 100, placing it 145th out of 176 countries studied. The Fund for Peace's Fragile States Index, which evaluates the stability and legitimacy of governing regimes, placed Bangladesh at 89.1 — making it the 37th-weakest state in the world (FFP, 2017), though this reportedly represents a marked improvement from a decade ago. The state's legitimacy has nonetheless weakened in some respects relative to its past, despite improvements in other areas.
With most trade concentrated in Dhaka — the most secure area of the country — the lack of financial infrastructure and rampant corruption stand as the biggest obstacles to trade financing. Questions about the rule of law add a further layer of uncertainty.
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