A file photo shows a worker sewing clothes at a garment factory on the outskirts of Dhaka. Experts and exporters fear that if the EU’s proposed GSP scheme for 2024-2034 is implemented, Bangladesh’s ready-made clothing and textiles may not receive duty-free benefits as part of the SPG Plus system on the European market. – Photo New Age
Experts and exporters fear that if the EU’s proposed GSP scheme for 2024-2034 is implemented, Bangladesh’s ready-made garments and textiles may not receive duty-free benefits as part of the SPG Plus system on the European market.
They said that after moving from least developed to developing country status, it would be difficult for Bangladesh to comply with some of the provisions of the EU’s proposed GSP scheme.
Experts and exporters urged the government to work with the EU to remove provisions from the proposed regime, which could be restrictive for Bangladesh’s garments and textile products to benefit from tariff advantages under the GSP Plus.
The European Commission unveiled on September 22 the new legislative proposal for the new EU GSP regulation for the period 2024 2034 which could be adopted in the European Parliament in September-October 2022.
“In accordance with the provisions set out in the new proposed GSP provisions, it appears that Bangladesh is now likely to qualify for GSP + upon graduation from LDCs, but the specified EU ‘guarantees’ would exclude the country’s clothing exports. of any tariff preference. The director of the Bangladesh Institute, Abdur Razzaque, told New Age on Saturday.
He said that in the proposed new EU GSP, the EU had removed the criterion of the share of imports to access GSP +, which would not have allowed Bangladesh to benefit from GSP +.
As an LDC, Bangladesh enjoys duty-free access to the EU market under the Everything But Arms program.
Under the existing GSP scheme, Bangladesh is not eligible to apply the benefits of GSP + in the EU, as the country’s share in imports covered by the EU’s GSP is well above the 7.4 for one hundred required.
Although the new proposals suggested removing the import share criterion, they also clarified that if the combined share of knits, woven goods and home textiles from a country exceeds 6 percent of total EU imports of the same products, safeguard measures would be triggered to remove duty-free market access for these products.
Razzaque said Bangladesh’s share in total EU imports of clothing items was over 13 percent.
“The safeguard clauses will therefore be applicable in Bangladesh,” he said.
“With a clothing share exceeding 6 percent of total EU imports, it would still be possible to obtain duty-free preferences if Bangladesh’s share of S-11b (HS 61 + 62 + 63) products as a percentage of all EU GSPs – covered imports of the same products were less than 37 percent, ”he said.
However, Bangladesh’s corresponding share was estimated at nearly 50 percent, Razzaque said.
He said Bangladesh would benefit from GSP + preferential access.
However, its clothing items would be subject to the EU’s most-favored-nation tariff rates, he said.
“That is, if the proposed rules remain unchanged, the average tariff rate on garment exports from Bangladesh to the EU will drop from currently zero to almost 12% on average,” said Razzaque, also president. of Research and Policy Integration for Development, says.
He said clothing exporters had already discussed the matter with the government and asked it to take appropriate diplomatic initiatives to secure duty-free market access for clothing products in the EU under the GSP + after the transition from the LDC country to a developing country.
He said Bangladesh should now engage with the EU so that restrictive EU safeguard provisions can be removed to allow Bangladeshi garment exporters to continue to enjoy duty-free market access. within the framework of the SPG +.
“The EU’s proposed GSP regulation for the period 2024-2034 is daunting for the garment and textile industry in Bangladesh,” said Mohammad Hatem, executive chairman of the Bangladesh Knitwear Manufacturers and Exporters Association.
He said that in the proposals there were many provisions that would limit the ease for Bangladesh in EU markets.
“It would not be possible for Bangladesh to fulfill many of the conditions of the new GSP proposals and our clothing and textile products might not benefit from GSP +,” Hatem said.