Bangladesh seeks extension of EU trade benefits sometimes after LDC graduation
Bangladesh wishes the EU to keep providing the existing zero duty profit even after its graduation to a developing country while the Covid-19 pandemic is going for a heavy toll in the southern Asian nation's economy.
Bangladesh offers been enjoying zero duty benefits on export since 1973 beneath the EU's generous Everything but Arms (EBA) scheme, meant for the least developed countries (LDCs).
The commerce ministry sent a letter to the EU previous month seeking the EBA extension, said Commerce Secretary Md Jafar Uddin.
"Found in the letter we didn't mention any particular period or any particular scheme. We sought the continuation of the current EBA as we've been facing crisis in different ways because of the coronavirus pandemic."
"We will be ready to graduate to a growing region from an LDC in 2024 according to our past decision," he said.
Officially, Bangladesh can be a developing country in 2024 and three extra years will get just as a grace period for preparation.
Normally, the EU will not give trade benefits under the EBA immediately after a country's graduation.
So, after 2027, Bangladesh will have to either come to be granted the GSP Plus or the extension of the existing EBA to take pleasure from the zero-duty benefit to the EU, the vacation spot for 64 per cent of Bangladesh's gross annual garment shipment of $34 billion.
The EU has been conducting a survey on its EBA and it is expected that they can also conduct a survey on Bangladesh the following month, the secretary said.
Not only the EU, Bangladesh as well demanded trade services from the united states as the government has already assigned a particular committee to attract even more American investment here.
But Bangladesh may not get zero duty benefit on garment export to the USA, as the Trump administration offers zero duty benefit on export of garment things only to some African countries beneath the African Progress and Opportunity Act.
America allows zero duty gain for 97 per cent of the merchandise of the LDCs, but garment products from Bangladesh are not contained in the list.
Due to this fact, Bangladeshi exporters face 15.62 % duty while sending apparels to the united states, the country's single most significant export vacation spot where over $ 6 billion worth of garment things are shipped a good year.
Still, the tiny Asian nation possesses been performing strongly in america because of high demand for Bangladeshi goods now there.
Jafar Uddin said his ministry offers been working to signal Preferential Trade Agreements (PTAs) with wide product coverage with Nepal, Bhutan and Indonesia.
"The vast coverage of products beneath the PTAs means the agreements will be nearly Free Trade Agreements [FTAs]," he said.
Regarding duty privilege to the united kingdom following the Brexit, he said the British authorities has already guaranteed the commerce ministry that it could continue providing the existing trade benefits even just after separation from the EU.
"Our expectation is that the EU will extend its EBA for Bangladesh at least for 10 more years following the official graduation in 2024," stated Mohammad A Momen, a director of the Bangladesh Garment Producers and Exporters Association.
The most common grace period for three years up to 2027 won't work for Bangladesh as the economy has been reeling from the coronavirus shock, he said.
The garment sector alone contributes 84 % of the countrywide export and directly employs 4.1 million workers, Momen also said.
One crore more persons are directly involved in the garment sector, which includes also empowered numerous ladies, said Momen, also a good professor of the Institute of Business Administration of Dhaka University.
Moreover, Bangladesh sheltered a lot more than 10 million Rohingyas and the country's contribution is lauded for peacekeeping worldwide, he said.
"We have invested vast amounts of US dollars in the sector and backward linkage industries. We are in need of more trade benefits from the EU and additional designed countries for our creation."
The Chinese garment sector is 80 years good old whereas the business commenced in Bangladesh only 40 years back, he said. "So, expansion of the trade privilege for all of us can be logical," he also said.
Bangladesh will encounter competition in the EU industry after graduation while Vietnam has already signed an FTA with europe.
Some 74 % of Bangladesh's export earnings come beneath the preferential trade as an LDC. Of the percentage, 64 % comes from the EU and 10 per cent from Japan, Canada and additional developed countries.
Bangladesh's export will decline by 5.7 % annually if the EBA is not extended and the neighborhood exporters must face an 8.7 percent duty to the EU.
Bangladesh must think for the GSP In addition position to the EU following the graduation, said Ahsan H Mansur, executive director of the Policy Study Institute.
The EU has recently granted GSP As well as to many countries after the graduation.
To avail the benefit, Bangladesh must improve in four main areas, such as cover of environment, labour rights, curbing corruption and human rights.
Moreover, Bangladesh must ratify the 27 UN Conventions for the EU trade center.
The plea of Bangladesh in getting GSP Plus to the EU is strengthened further because of the financial losses from the Covid-19, the economist said.
Source: www.thedailystar.net
