By Elishya Perera
DHAKA, Bangladesh (CWBN)_ Bangladesh garment exporters will experience a loss of $4 billion, if trade benefits would be removed by the European Union, following the Asian country’s graduation to a developing nation in 2024, a study by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says.
The EU offers the Standard Generalised System of Preferences (GSP) for low and lower-middle-income countries, which means a full or partial removal of custom duties.
Accordingly, while Bangladesh enjoys duty-free, quota-free access for all products except arms and ammunition in the EU market, however, the World Bank says that the Asian country is on track for graduation from its position as a Least Developed Country (LDC) by 2024.
$25 billion, or 73 per cent of the external trade of Bangladesh, enjoys duty-free access as an LDC, of which 61 per cent is exported to the EU. Therefore, these exports would be subjected to tariffs after the LDC graduation takes effect in 2024.
On an average, the total imports of GSP eligible products into the EU have to be less than 7.4 per cent of the total imports of the bloc from all GSP beneficiary countries.
Accordingly, the study recommends lobbying with the EU regarding this threshold. “It is important to have the issue of threshold addressed in the new GSP regulation. If we can successfully lobby with the EU to re-fix its threshold criteria from ‘import under EU GSP’ to ‘EU’s overall import’, this may resolve the problem,” the study said.
The GSP Plus is a special incentive arrangement which aims to achieve sustainable development and good governance. Therefore, the initiative provides free trade benefits to vulnerable low and lower-middle-income countries which implement 27 international conventions on labour rights, human rights, environmental protection and good governance.
Bangladesh has ratified almost all of these major conventions except for the International Labour Organisation’s Minimum Age Convention. Therefore, the BGMEA study also suggested ratification of the ILO Convention on the minimum age and implementing policies which set out Bangladesh’s strategy to comply with the 27 international conventions.
