Improve business climate quickly to gain GSP Plus in EU

Bangladesh needs to improve its business climate urgently to qualify for the GSP Plus status in the European Union after its graduation from a least developed country to a developing nation, a top diplomat said.

Peter Fahrenholtz, German ambassador to Bangladesh, said the Generalised Scheme of Preferences (GSP) Plus gives an opportunity to Bangladesh to enjoy tariff-free exports.

“But it will not come automatically. Bangladesh needs to protect labour rights too,” he said.

The GSP Plus is a special incentive arrangement for sustainable development and good governance. It slashes tariffs to zero for vulnerable low and lower-middle income countries that implement 27 international conventions related to human and labour rights, environment protection and good governance.

Fahrenholtz said Bangladesh has achieved tremendous progress and a high growth rate but a massive amount of foreign direct investment was needed for the sustainability of the growth rate.

“The imports of essential goods need to be cheaper and easier,” he said, after the sixth round of the EU-Bangladesh Business Climate Dialogue at the commerce ministry in Dhaka yesterday.

“Progresses are there. No doubt. But we need to move quicker.”

More progresses are needed in the areas of overall regulations and registration of foreign companies, trade relations and the tariff sector, the envoy said.

“We need to fight against corruption obviously. The prime minister has begun a campaign against corruption. I think it is very good. This has to be followed through.”

“If you move into the middle-income country category, it has to be brought under control.”

Fahrenholtz said the government has only 12 months to comply with the conditions for the GSP Plus facility. “It is possible to fulfil the conditions.”

“It is a good chance for Bangladesh. We have seen a tremendous progress over the last 20 years and especially over the last five years.”

Currently, eight countries enjoy the GSP Plus benefit. The countries are Armenia, Bolivia, Cabo Verde, Kyrgyzstan, Mongolia, Pakistan, the Philippines, and Sri Lanka, according to the EU website.

Rensje Teerink, the EU ambassador to Bangladesh, said FDI plays a key role here and Bangladesh would get EU FDI if the country can ease business climate.

Some very technical issues have already been resolved between Bangladesh and the EU, she said, adding that labour rights have been addressed and more progresses were needed.

Labour and human rights and good governance issues will have to be improved if the country wants to obtain the GSP Plus on becoming a developing country in 2024.

The EU is the largest export destination of Bangladesh. Of the total exports last year, 58 percent was destined for the EU, according to Tapan Kanti Ghosh, chairman of Bangladesh Tariff Commission.

Bangladesh exported more than $23 billion worth of goods to the bloc last year.