Bangladesh needs to negotiate with the European Union (EU) over the trade threshold for enjoying the Generalised System of Preferences (GSP) Plus once it graduates from the least developed country category, said a noted economist on Wednesday.
The EU's 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 has already crossed the threshold and it is already at 26 per cent now, said Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue (CPD).
Debapriya was presenting a keynote paper on "LDC Graduation of Bangladesh: Are We Ready for GSP+?" at a webinar organised by the Bangladesh German Chamber of Commerce and Industry (BGCCI).
Bangladesh's ambassador to Germany, Mosharraf Hossain Bhuiyan, said some 61 per cent of the country's export was destined for the EU, for which the GSP Plus was very important, according to a BGCCI statement.
He suggested signing a free trade agreement to enjoy the duty-free benefit after 2029 as the local exporters would face an 8.7 per cent duty in the absence of either the GSP Plus or a free trade agreement.
Compliance with labour and environment issues is needed to secure the GSP Plus, said Ahsan H Mansur, executive director of the Policy Research Institute (PRI).
Negotiation capacity at the ministry level was weak, which is one of Bangladesh's biggest problems, and so the country needs further development in this area, he said.
Faruque Hassan, president-elect of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh exported $34.13 billion worth of readymade garments in fiscal 2018-19.
Of it, $25 billion worth of export enjoyed duty-free market access to different countries for Bangladesh being a least developed country, he said.
This means 73 per cent of Bangladesh's export is entitled for duty-free access which will face new tariff regime as soon as Bangladesh officially enters into the higher middle income category, he said.
Md Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association, said they need mainly to focus on keep the single transformation status valid as long as possible.
He also said Vietnam was Bangladesh's prime competitor and they were set to get duty-free access to the EU, which would have a double impact on Bangladesh's export.
BGCCI President Omar Sadat, Hafizur Rahman, director general of WTO Cell under the commerce ministry, Faiyaz Murshid Kazi, director general (West Europe & EU) under the foreign affairs ministry, and Zafar Sobhan, editor of Dhaka Tribune, also spoke.