Duty waiver continues for exports to Canada

Bangladeshi exports will continue to enjoy zero-duty access to Canada even after amendments to the North American country's duty-waiver criterion, an official of Bangladesh's mission in Canada said yesterday.
“This landmark decision has culminated in a safeguard for the existing $1 billion export from Bangladesh to Canada and future growth in the apparel sector,” the government said in a statement.
Earlier in December 2012, the review of the General Preferential Tariff (GPT) guidelines proposed that if at least 60 percent of the value of a product had not been from raw materials from one or more of the GPT beneficiaries, the exporting country would lose the GPT benefits in Canada.
In that scenario, it would have been rather tricky for Bangladesh as more than 90 percent of the imported raw materials were from countries which would cease to be GPT beneficiaries after June 2014.
The country would have lost its GPT facilities including duty- and quota-free access for its garment exports due to high dependence on future graduating countries from the GPT regime, like India, China and Thailand.
Garment exports now make up 95 percent of Bangladesh's total exports to Canada.
When news broke of the proposed amendment, the country made extensive diplomatic efforts and conducted constant lobbying to the Canadian government.
The Canadian government, in its 2013 budget, said it will ensure that graduating countries from the GPT regime do not reduce the benefits of the LDCT (least developed country tariff) regime.
“The GPT and LDCT rules of origin regulations will be amended to continue allowing the duty-free import of textile and apparel items from least-developed countries that are produced using textile inputs from current GPT beneficiaries,” the statement said.
Masud Rahman, the immediate past president of Canadian Chamber of Commerce in Bangladesh, said the garment exporters will particularly benefit as they will be able to attract buyers who are now looking to move their custom out of China.
“It is our big achievement that the Canadian government has retained the duty benefit for Bangladesh,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
The move will consolidate Canada's position as an important export destination for Bangladesh, he added.
In fiscal 2011-12, Bangladesh's exports to Canada stood at $993.7 million, with the garment sector contributing $874.84 million, according to data from Export Promotion Bureau.