Bangladesh has to start preparing to secure GSP+ scheme in the EU so that the country’s exports are protected once it loses trade benefits in the post-LDC period, experts said at a webinar on Wednesday.
Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), said that in order to be eligible for GSP+, the country needs to fulfil a few criteria first.
He made the observation while delivering his keynote speech at a webinar on LDC graduation and GSP+ in EU, organized by the Bangladesh German Chamber of Commerce and Industry (BGCCI).
One such criterion is that of import-sharing, which says one country should not be exporting more than 7.4% of their total imports into the EU. As Bangladesh’s imports to the EU are much higher than 7.4%, the country is not eligible.
This is one area where Bangladesh has to work further to resolve the issue, and it is possible to resolve this, the economist said.
Other important criteria for achieving GSP+ are sustainability and good governance, he said, according to a press release.
“Bangladesh needs to have a cohesive, dynamic, and inclusive transition strategy for the GSP+ scheme and to link it with other global initiatives, particularly taken by the World Trade Organization and the United Nations,” Debapriya added.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said gaining GSP+ benefit would be a contentious issue — not an easy one.
The lead panellist said compliance with labour and environmental issues is needed to secure GSP+ in the EU.
He also stressed the capacity development of ministries and other agencies on holding negotiations for securing benefits and signing free trade agreements (FTA).
Persuasive diplomatic initiatives along with substantive changes in some global conventions will be other important areas for securing the GSP+ scheme, he further said.
“We have to do our homework very carefully, thoroughly, and with an open mind. We also have to open up our economy because the EU is not the only issue. We will also have to deal with other trading partners for negotiating preferential trade agreements like Japan, Australia, China, and many others,” the economist said.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President-Elect Faruque Hassan said Bangladesh exported $34.13 billion worth of RMG products in 2018 and 2019, of which $25 billion worth of exports enjoyed duty-free market access in the different countries.
“This means 73% of our exports are entitled to duty-free access. But these will face a new tariff regime as soon as Bangladesh officially enters into the middle-income category,” he said, adding that 61% of readymade garment exports to the EU market would come under new tariffs after the LDC graduation.
Md Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Vietnam is the number one competitor of Bangladesh, and they are going to get duty-free access to the EU market, which will have a double impact on our export.
We should make all-out efforts to secure GSP+ and extend the Enterprise Bargaining Agreement [EBA], he added.
He suggested that the government take a lead with the support of think tanks and business leaders from the apparel sector.
BGCCI President Omar Sadat said the overall capability of the economy has to be improved and that Bangladesh has to become an active partner of regional and sub-regional initiatives.
After graduation, Bangladesh has to go for high rate borrowing and continue negotiations with trade partners on concession and trade preferences, he added.
Among others, Bangladesh Ambassador to Germany Md Mosharraf Hossain Bhuiyan; Hafizur Rahman, DG of the WTO Cell at the Ministry of Commerce; Faiyaz Murshid Kazi, DG of West Europe and EU at the Ministry of Foreign Affairs; Zafar Sobhan, editor of Dhaka Tribune; and Golam Murshed, managing director of Walton, also spoke at the webinar.
