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Dhaka needs to consider EU threat seriously: Experts

  • Published at 10:55 am May 24th, 2013
Dhaka needs to consider EU threat seriously: Experts

Bangladesh needs to consider the European Union (EU) threat to withdraw its duty-free, quota-free (DFQT) access to the EU market seriously and act promptly as the EU might take serious decisions dealing a big blow to the RMG sector in particular and the economy in general, experts said.

They think Bangladesh needs to send out a positive message and a good impression to the EU by taking serious and sincere steps instead of giving lip service.

If Bangladesh loses the biggest market of the 27-nation bloc, accounting for about 60 percent of the country’s RMG exports, it will be very difficult to recover as the economy does not have the strength to absorb any big shock like this, they said.

“We’ll have to take the warning seriously. We need to show them that steps are being taken sincerely and seriously regarding compliance,” Director General of the Bangladesh Institute of Development Studies (BIDS) Dr Mustafa K Mujeri told UNB on Friday.

He said the warning is a message from them that they will withdraw the befit if Bangladesh government, owners and other stakeholders do not take serious steps. “Their ultimate decision will depend on what steps we’ve taken and how sincere and serious we’re in addressing their concerns.”

Responding to a question, Dr Mujeri said the EU is a big market for Bangladeshi RMG and if Bangladesh loses the market once, the entire RMG sector will hugely be affected. “It’ll invite a big jolt what will be difficult to overcome.”

He said the competitors of Bangladesh in the global RMG (readymade garment) will take control over the EU market, and it will be very difficult to recover it.

“The government, owners and other stakeholders will have to act seriously and promptly so that a positive message and impression is sent out to them,” he said.

If the government, owners and other stakeholders do not take serious steps and if the things remain only confined to speech-making as in the past, they (EU) will take serious steps.

Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have also expressed their concern over the warning and laid emphasis on coordinated efforts to address the challenge.

“It’s a warning. Any kind of warning is certainly negative. We need to take collective efforts,” BGMEA President M Atiqul Islam told this correspondent.

Islam, also Managing Director of the Islam Garments Ltd, said there is an urgent need for coordination and all stakeholders need to act instead of talking too much.

“We want to move forward following a roadmap…stakeholders, buyers and agents will have to take the responsibility equally and identify the problems and address those timely,” he said.

The BGMEA President mentioned that many steps are being taken in terms of safety, working environment and workers right. “We have to boost confidence and come out from this negativity.”

Contacted, President of Bangladesh Exporters Association (BEA) Abdus Salam Murshedy said, “The EU are concerned and they’ve given some conditions regarding improvement of workers living standards, fire and building safety. If these are addressed rightly, things will turn positive.”

He said there are already some positive signals like labour law amendment process and others. “When they’ll come across these improvements, they’ll consider us positively. We hope the EU will be convinced with the steps we’re taking.”

Murshedy, also the former BGMEA President, said there is a need of combined efforts for addressing all the concerns, and there is no scope for hide and seek.

Former first vice president of the BGMEA M Nasiruddin Chowdhury termed the EU warning as a ‘tough warning’ and said the export will drastically fall if any negative news comes from the EU market.

“It’s a tough warning…they want to see visible actions and steps to address their concerns. There’s no doubt that export will fall drastically if the EU withdraws the DFQF benefit,” Chowdhury said.

Bangladesh’s apparel exports to the EU made a leap since January 2011 when it allowed special benefit for Bangladeshi garments made from imported fabrics. There is a 46 percent rise in apparel exports between a year without and with the benefit, indicating the importance of this status in the country’s apparel industry.

The EU is considering trade action against Bangladesh to pressure Dhaka to improve safety standards. Last year, the EU member states imported about €9.2 billion of goods from Bangladesh.

Foreign Minister to Hold Talks

Amid the European Union’s (EU’s) threat to withdraw Bangladesh’s duty-free, quota-free (DFQT) access to its market, Foreign Minister Dr Dipu Moni will be visiting Brussels from May 28 to 30 to have talks with EU leaders in an effort to keep Bangladesh’s market there unhurt.

The EU has already warned of withdrawing DFQF facility for Bangladesh and it will press for an investigation into labour practices in the country unless it sees an improvement in its working conditions following the collapse last month of Rana Plaza housing a number of garment factories.

She will also attend a seminar there on Bangladesh, titled ‘The Current Situation in Bangladesh: Prospects and Challenges’ that will be held in Brussels on May 29.

Foreign Minister Dipu Moni will deliver a keynote speech at the seminar while Executive Director of the EIAS Paulo Casaca and Vice Chairman Dick Gupwell will also address it.

EU Warning

Following the recent fires and building collapse housing factories in Bangladesh, MEPs (Member of European Parliament) have called for justice for victims and EU action to prevent similar events in the future.

They want the Commission to promote responsible business conduct among EU companies operating abroad and ensure strict compliance with all legal obligations in the areas of human rights, labour and the environment.

Parliament recalls in the resolution adopted on Thursday that Bangladesh benefits from duty- and quota-free access to the EU market and that these preferences can be withdrawn in the event of serious and systematic violations of the principles set out in different human rights conventions.