Bangladesh has been enjoying duty-free and quota-free market access in Chile since January 2015
The country’s exports to Chile rose by one third in the past fiscal year thanks to the South American nation giving duty-free market access to Bangladeshi goods.
Total earnings from exports to Chile grew 33.32% in FY2017-18 to $86.28 million, of which $78.93m were accountable to the readymade garments (RMG) sector, Export Promotion Bureau (EPB) data has revealed.
Figures for the first quarter of the current fiscal year are also looking healthy, with total earnings from exports to Chile rising by 50.45% from the same period last year, to $41.44m.
Bangladesh has been enjoying duty-free and quota-free market access in Chile since January 2015.
The move followed a February 2014 meeting in Dhaka of Commerce Minister Tofail Ahmed and the Chilean ambassador, Cristian Barros, after which they announced that Chile was going to offer duty-free market access for goods originating from Bangladesh.
“The duty free market access to Chile is a result of government’s bilateral trade talks, which helped to increase exports to the country,” Tofail Ahmed told the Dhaka Tribune.
Before the privilege was introduced, imports from Bangladesh were subject to average tariffs of 17%. This was reflected in the country’s export earnings in the fiscal year 2014-15, of only $36.93 million.
“Bangladesh exports to Chile will continue to rise sharply and it will become a bigger market for the exporters,” Tofail said.
Abdus Salam Murshedy, the president of the Exporters Association of Bangladesh (EAB), told the Dhaka Tribune that Chile is expected to become a “big market” for Bangladeshi goods, especially apparel products.
“It is a good news for Bangladesh as we are trying to diversify export destinations,” he said.
“I urge the government to take similar initiatives to get duty-free benefits from other potential global markets as it will help reaching the vision of $50 billion export earnings from apparel sector by 2021.”
Economists have long stated the need for Bangladesh to diversify its export destinations and ease the over-reliance on the RMG sector.
“Bangladesh’s exports are highly dependent on EU and US markets,” the former caretaker government finance advisor, AB Mirza Azizul Islam, told the Dhaka Tribune.
“In attaining the export target, Bangladesh should focus on new markets to enlarge the export earnings and to reduce dependency from two traditional export destinations.”
Islam said healthy growth in Chile indicates that duty free market access boosts export earnings.
“In remaining competitive in the global markets, Bangladesh has to concentrate on Free Trade Area agreements and holding regular bilateral trade talks to get duty free market access,” he said.
Bangladesh’s other exports to Chile include pharmaceuticals, woven and knitwear garments, jute yarn, footwear, caps, cotton bags, engineering products and parts, plastics, ceramics products, and clocks and watches.
Bangladesh imports cooper, fruit, fish products, paper and pulp, chemicals and wine from Chile.