If Myanmar continues to enjoy duty and quota-free access to Europe’s market, Bangladesh’s emergence as a major exporting nation may come under serious threat, a commerce ministry official has said.
He said the faculty could transform the “once outsider” nation into a magnet for labour intensive factories.
According to the European Commission website, as a least developed country, Myanmar benefits from the most favorable regime available under the EU’s Generalised Scheme of Preferences (GSP), namely the Everything But Arms (EBA) scheme.
The EBA gives the 50 least developed countries, including Myanmar, duty free access to the EU for export of all products, except arms and ammunition.
On September 12, Tapan Kanti Ghosh, commercial counselor of the Bangladesh Embassy in Belgium, had sent a letter to the ministry expressing his concern and advising necessary steps in this regard, he commerce ministry official said. Copies of the letter were sent to the Export Promotion Bureau and the foreign ministry.
Citing comparative export data from Bangladesh and Myanmar, the letter apprehended that the Myanmarese garment exporters would be in a strong position in a short time in the global market – including the 27-nation EU market – taking advantage of its healthy energy resources.
In 2012, Myanmar exported Tk218.8m to the EU countries at zero tariff while Bangladesh exported Tk12bn at 5% tariff during the same period.
Leading apparel exporter Salam Murshedi said: “Because of duty and quota-free access, our exports to EU have been growing at double-digit rates since the late 1990s. But if EU continues to offer the same preferences to Myanmar, they will emerge as a strong competitor in two-three years. They have unlimited land, cheap power and labour, and are sitting on one of Asia’s largest gas reserves. All they need is foreign investment,” he said.
Murshedi, who is also the president of BGMEA, said Myanmar had already wooed some major investors from Japan, China and Thailand.
Some others, who had been waiting in the wings, would rush to set up labour-intensive factories in the nominally-democratic country anytime, he said.
Image crisis, coupled with poor infrastructure and political unrest, have badly hampered Bangladesh’s exports, Murshedi pointed out.
Myanmar was reinstated into EU’s GSP tariff preferences on July 19, 2013, in response to the political and economic reforms in the country since 2011. These preferences had been temporarily withdrawn since 1997 due to violations of the ILO convention on forced labour.
Khandker Golam Moazzem, additional director of the Centre for Policy Dialogue, said labour safety is one of the major obstacles in the development of Bangladesh’s garment sector.
If Bangladesh failed to improve labour safety standards then countries like Myanmar might take the advantage, he warned.