Munshi calls for caution in fulfilling GSP Plus conditions
Bangladesh will have to be cautious in fulfilling important conditions for obtaining the Generalised System of Preferences (GSP) Plus status of the European Union (EU), said Commerce Minister Tipu Munshi yesterday.
"We have to remain cautious because there are new expectations from our European colleagues on labour, good governance and environment issues," he said.
"The EU has proposed to add new international conventions and agreements to the GSP list – such as the Paris agreement on climate change, and some new ILO and UN conventions," said the minister.
"We have to work with other ministries to ensure we are fully compliant before the time comes when we apply for GSP Plus," Munshi added.
The world's largest trade bloc last month proposed lifting a major condition, a 7.4 per cent import threshold, of the GSP Plus for 2024-34.
The GSP Plus status allows countries duty-free export to the trade bloc. To be eligible, a country cannot account for over 7.4 per cent of the EU's annual imports.
However, Bangladesh is already at 26 per cent, which is a major obstacle to obtaining the GSP Plus status.
"We have to remain cautious throughout the journey. We are in 2021. The new GSP regulation kicks in January of 2024," said Munshi.
"We graduate in 2026 and EBA (Everything but Arms) ends in 2029. As per the draft of the new GSP regulation, with the major obstacle removed, we will qualify for GSP Plus," he said.
Bangladesh is set to make the United Nations status graduation from a least developed country (LDC) to a developing one in 2026.
The EBA is a part of the GSP under which all imports to the EU from the least developed countries are duty-free and quota-free, with the exception of armaments.
Bangladesh will immensely benefit from the new proposed EU GSP Plus scheme as the rules have been eased further, said Munshi.
He was addressing a virtual discussion on "Economic tie of Bangladesh & Europe: New Regulatory Regime" organised by the Ministry of Commerce and Dhaka Chamber of Commerce and Industry (DCCI) on the sidelines of an ongoing Bangladesh Trade & Investment Summit 2021.
DCCI President Rizwan Rahman moderated the discussion, attended by government high ups, private sector investors, diplomats, leaders of the business community and exporters.
In spite of the import threshold removal proposal, Bangladesh needs to improve in some others areas to obtain the GSP Plus status, said Rubana Huq, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Apart from human and labour rights and environmental protection, the EU said it would also include political issues for eligibility of developing countries, she said.
Huq also said it was time to tell the EU that mutual benefits should be ensured as the latter always sets conditions on allowing trade benefits.
She said Bangladesh has the highest or 150 green garment factories in the world and was the lowest carbon emitter but was still cited as an example for vulnerabilities.
Although international buyers talk about sustainability of industries, they never mention anything about sustainable prices of garment items, she said.
Prices offered for apparel items exported from the country have gone down by more than 2 per cent over the last two years, said huq.
Grameenphone Ltd, now with 83 million subscribers, provided Tk 93,000 crore to the public exchequer since making an appearance here and Tk 8,000 crore last year, said Yasir Azman, the mobile operator's chief executive officer.
Unilever Bangladesh Limited is setting up new manufacturing plants at Mongla Export Processing Zone to meet rising demand for fast-moving consumer goods, said Zaved Akhtar, its CEO and managing director.
Naser Ezaz Bijoy CEO of Standard Chartered Bangladesh, and Momin Ud Dowlah, chairman and managing director of the Eon Group of Industries, also spoke.
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