Home ›› 17 Mar 2023 ›› News
Authorities should rationalise tariffs, ensure compliance with required standards, remove anti-export bias and improve product quality to boost the exports of non-readymade garments products to the United Kingdom, experts and industry insiders recommended on Thursday.
Bangladesh’s apparel export to the UK is expected to reach $11 billion by 2030 from $4.5 billion in FY22, while non-RMG product export is estimated to touch 1.3 billion from the 0.7 billion, they said.
Economists, researchers and stakeholders made the remarks at a consultation meeting titled, ‘Expanding and Diversifying Exports to the UK Market’ on Thursday in a city hotel in Dhaka. The prorgamme was organised by Research and Policy Integration for Development (RAPID) with support from the UK’s Foreign, Commonwealth and Development Office (FCDO).
Potential
Speaker on the occasion said Bangladeshi non-RMG products, particularly leather goods and footwear, agro and processed food, light engineering products, and fish and shrimp items have a high potential to be exported to the UK market.
They suggested that authorities focus on obtaining globally recognised certifications, setting up necessary testing facilities, improving productive capacity for non-RMG sectors, and seek additional financial assistance while making use of the existing UK technical and financial support.
“The UK is the third largest export destination for Bangladesh. It is still undecided if Bangladesh’s garment exports after LDC graduation will continue to receive duty-free market access in the European Union. But, under the Developing Countries Trading Scheme (DCTS) Bangladesh’s apparel exports will continue to get duty-free access in the UK,” Dr Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID) said.
He said Bangladesh is the second largest apparel exporter in the UK. Between 2010 to 2020, Bangladesh’s penetration in the UK market doubled to 14 per cent, while China’s share declined from 37 per cent to 21 per cent during the period.
“Some non-RMG products are in high demand in the UK market so we should make necessary policy in this regard and maintain the demand and supply issues,” he also said.
Challenges
Speaking on the occasion, Abdur Razzaque pointed out the limits and challenges for exporting to the UK, including lack of knowledge and information about the UK market, lack of integration with the UK’s supply chain, lack of certification and standard requirements.
He suggested removing anti-export bias and rationalising tariffs, strengthening incentives for the export sectors, tackling infrastructural bottlenecks, improving port efficiency, and ensuring access to low-cost finances.
“There is policy discrimination in Bangladesh. Not all export sectors are equal. Bonded warehouse facilities are severely restricted for non-RMG sectors. These should be addressed immediately,” the researcher added.
Policy reform, diversification
Duncan Overfield, deputy development director at Foreign, Commonwealth and Development Office (FCDO) of UK, discussed the necessity of relevant policy reforms for Bangladesh that will best serve the country.
He said, “Bangladesh must explore the necessary policy options and support to ensure the best utilisation of UK DCTS, mostly after the LDC graduation period.
Duncan added that the perception of goods originating from Bangladesh will become more positive over time, much like how the perception of products from Hong Kong and China changed over the years.
Vice Chairman and CEO of the Export Promotion Bureau (EPB) AHM Ahsan said, “Export diversification is one of the priority areas we are working on. However, we need to go a long way. Our key improvement areas include, maintaining SPS, ensuring proper packaging, improving the country’s perception and meeting consumer demand to tap the unutilised export potential to the UK market.”
Meanwhile, Chairman of the Bangladesh Trade and Tariff Commission Md Faizul Islam said both public and private bodies need to work together to ensure export diversification.
Regarding the tariff structure of Bangladesh, he said high import tariffs work as disincentives for consumers as well as producers. The government is working on tariff rationalisation.
Speaking as the chief guest, Senior Commerce Secretary Tapan Kanti Ghosh said, “Our exporters are well informed about the EU GSP facility but have limited information about UK DCTS.”
He said Bangladesh relies on import tariff revenue which is important for meeting the government expenditures like education, health and social protection. Thus, tariff rationalisation will create a challenge to ensure these expenditures.
“Moreover, sometimes our entrepreneurs ask for protection from foreign products getting into the local market, which we cannot deny. However, after 2026, Bangladesh needs to lower the tariff rate, and therefore, our exporters need to be mindful of the increasing competition.,” Tapan added.
Regarding the shrinking foreign market access, the commerce secretary said, “We are negotiating with countries to secure favourable market access.”
