Diplomatic efforts to protect garment export to EU

Bangladesh will expedite diplomatic efforts with the European Union for easing the proposed safeguard measures on textile and garment so that the shipment to the bloc remains unhurt, said Commerce Minister Tipu Munshi yesterday.

"We will start talking to the EU about the safeguard measure soon," he said while briefing reporters after a meeting with Charles Whitley, the newly appointed EU ambassador to Bangladesh.

"We will address different issues so that we qualify for the GSP Plus status after our graduation to a developing country from the least-developed country."

According to the proposed GSP Plus scheme, any single garment item that crosses 6 per cent of the total value of the garment items imported to the bloc will not enjoy the zero duty benefit and will rather face the usual 12 per cent duty.

The value of the total imported apparel from Bangladesh to EU countries has already gone past the threshold and now stands at more than 9.74 per cent if the import value of clothing items in 2019 is considered.

The new proposals could be adopted in the last quarter of 2022, with the fresh 10-year GSP scheme becoming effective from January 2024.

"Since, the EU is the largest export destination for Bangladesh, we will start talking to them to have the market facility extended," said Munshi.

Currently, 58 per cent of the total export and 64 per cent of total garment items of Bangladesh is destined to the continent.

Bangladesh is expected to lose duty benefit in the EU as it is set to graduate from the LDC group in 2026. The EU will, however, continue the duty privilege up to 2029 to help the country absorb any shocks that may stem from the transition.

"Our expectation is that we will get more years to enjoy the duty privilege in the EU," said the minister.

In order to qualify for the GSP Plus status, countries will have to implement 27 international conventions related to human rights, labour rights, protection of the environment, and good governance.

One of the conditions deals with child labour issue, but Munshi said since Bangladesh had no child workers, the issue didn't came up for discussion during the meeting with the EU envoy.

Munshi also hinted at reducing the price of edible oil as their prices were showing a downward trend in the international markets.

"There will have an impact on the prices of edible oil in the local markets as the prices of the cooking oil are declining in the international markets. However, it may take a while to have any major impact."

He attributed the price spiral in the global markets for the hike in the prices of four widely consumed basic commodities, namely sugar, edible oil, onion and lentil in Bangladesh.

A majority of the demand of the four items is met through imports as Bangladesh does not produce enough to cater to the growing demand.

The onion price has declined to some extent as the local variety has hit the market, said Munshi.

The National Board of Revenue has cut the VAT on the import of sugar to some extent in response to a recent request of the commerce ministry. However, the request to slash the VAT on the import of edible oil has not been entertained.

"The government needs revenue as it is implementing a lot of mega projects," the minister added.