Diversified products in export baskets and the use of technologies to support required production are among the challenges for utilising the EU market ahead of Bangladesh's LDC graduation, said the participants at a webinar on Wednesday.
The country’s industries will need to ensure a production environment so that they can catch the EU market after graduation when the facilities will not be accessible, participants added.
Bangladesh is enjoying a duty-free export facility in the European Union (EU) market under the general preference system (GSP). After LDC graduation, the country will face strict Rules of Origin requirements.
Participants discussed these at the webinar jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and the Ministry of Commerce.
As part of the day two event of Bangladesh Trade and Investment Summit 2021, which was kicked off Tuesday, the webinar 'Economic tie of Bangladesh & Europe: New Regulatory Regime’ will discuss the GSP Plus facility for Bangladesh after it graduates from LDC status in 2026, according to the DCCI.
Rizwan Rahman, president of DCCI, expressed the preliminary views and gave a presentation at the event while Commerce Minister Tipu Munshi addressed it as the chief guest.
DCCI president in his presentation highlighted that Europe’s initiative of 'Sustainability Compact for Bangladesh' aimed at ensuring labour rights and factory safety creates challenges for the sustenance of export-oriented small and medium RMG factories, as stringent compliance, to some extent, is unaffordable.
Europe’s EBA privilege for Bangladesh will continue until 2029. For GSP Plus eligibility, Bangladesh requires implementation of 270 million labour, environmental and industrial compliance, he continued.
Rubana Huq, managing director of Mohammadi Group and the former president of BGMEA, also echoed the same concern. She also underscored the need for diversified products in the RMG export basket as Bangladeshi companies mostly export five items to the global and EU market.
DCCI president added that there is a huge opportunity for Bangladeshi products in global markets as Halal goods.
Ms Rubana Huq also highlighted some prevailing challenges in exporting Bangladeshi products in the EU market.
Participants at the event also stressed the easy and globally accepted certification process as this is working as a major obstacle for the sector for Bangladesh being a Muslim country.
Bangladesh produces huge food items, including fish and meat but it still fails to catch the global market despite being among toppers in fish and vegetable production, said Momin Ud Dowlah, Chairman and Managing Director, Eon Group of Industries.
The timeline for implementation of 270 million labour, environmental and industrial compliance need to be extended and fiscal and technological support can be ensured for SME units as the way forward to those challenges.
Bangladesh has been enjoying the EU's "Everything but Arms" arrangement, which grants duty and quota-free access for all exports except arms and ammunition. Bangladesh is one of the main trading partners of Europe, accounting for around 35 per cent of Bangladesh's total trade in 2020, read the presentation.
Tipu Munshi said that the government is working hard and holding meetings with the EU to ease the Bangladeshi export there. And, we are preparing so that we can deal with the challenges after graduation.
The government is seeking more time to avail the duty-free export facility in the EU market, and the EU has ensured the duty-free facility for three years after 2026, he said.