Proposed EU GSP policy may benefit Bangladesh

Bangladesh will be able to apply for GSP+ facility in the European Union market after LDC graduation if EU member countries approve the Generalised Scheme of Preferences for the period 2024-2034.

At a press conference in Dhaka on Saturday, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan added that the BGMEA has held several ambassador-level meetings with the EU countries on the issue under apparel diplomacy policy.

As a least developed country, Bangladesh currently enjoys duty free access to the EU market. But the country is set to graduate in 2026 on recommendation of the Committee for Development Policy, and the EU GSP facility will expire in 2029.

The GSP+ facility – if granted by the EU – will allow Bangladesh to keep its duty free access till 2034.

On 21 September this year, the European Commission (EC) submitted a proposal in this regard to promote sustainable development in low-income countries, recommending the removal of the 7.4 per cent threshold (import share) currently imposed on countries under the GSP+.

The current GSP+ facility is set to expire in 2023. The EU’s imports from Bangladesh currently stand at around 26 per cent of their total volume. The region is also Bangladesh’s top export destination – reaching 60 per cent on average annually, according to the BGMEA.

Addressing reporters, Faruque said at the event, “I am also a diplomat, and I have been boosting our connectivity through diplomatic channels regarding the GSP issue.

“We are optimistic that the GSP facility for Bangladesh will continue for at least 12 years after LDC graduation. We are working towards this goal.”

Speaking about the GSP in the USA, Faruque said, “Regaining this facility in the US market is not easy, as it depends on political ties. If the country reinstates GSP for Bangladesh, we will be able to export goods worth up to $100 million without any duties.

“The USA has an import share of 6.26 per cent from Bangladesh, and we have a chance of improving this share through sustainable development, modernisation and improving our skills. We are making a concerted effort to exploit this potential.”

He added that the BGMEA has been calling for product diversification and curb overcapacity in factories.

BGMEA places seven demands

The apparel exporters’ association placed seven demands before the government. They sought an increase of working capital loan installments from 18 to 36, withdrawal of mandatory bonded warehouse licenses for procuring raw material through local back to back LCs.

If a company belonging to a particular group becomes a loan defaulter, other companies of the same group should be allowed to continue their banking activities, they demanded. The BGMEA also demanded that customs issues such as complications related to the bond license HS code be resolved.

The association also sought proper maintenance of scanning machines (USD machines) in Dhaka airport and proper protection of goods from rain. It demanded the government to allow imports of textile and apparel goods through all land ports with partial shipment.