Bangladesh exports to face a challenge

AS per a recent study, a number of countries including India, Pakistan and Vietnam could soon have duty free access to the European Union (EU). It is not a question of 'if' but 'when' this access will materialise, since Pakistan already enjoys duty free access under GSP to the EU as of January this year. Research findings point to a downturn for textiles and clothing to the tune of 1 per cent per annum. Taking that into a broader context, should India and Vietnam conclude a free trade agreement (FTA) with EU, which happens to be the destination for 65 per cent of Bangladesh readymade garments exports annually, we stand to lose out on in export earnings and could suffer a GDP decline to the tune of 0.27 per cent.
These are ground realities and there is still time to do something about it. We have been too complacent in our search for alternative markets beyond the EU. With Bangladesh lagging behind in competitiveness compared to other south and South-East Asian countries, it stands to reason why most of the projections are bleak across the board. With a FTA in place, Indian apparels could very well ease out a significant portion of Bangladesh RMG exports. The bottom line is market diversification. It falls largely on policymakers to engage in serious diplomatic efforts to explore untapped markets. China has one of the fastest growing middle classes in the world and Bangladesh could explore possibilities for a FTA that would facilitate entry of our products.