Bangladesh will step up diplomatic efforts with the European Union to ease proposed safeguard measures on textiles and clothing so that shipping to the bloc remains unharmed, Trade Minister Tipu Munshi said yesterday.
“We will soon start talking to the EU about the safeguard measure,” he told reporters after a meeting with Charles Whitley, the new EU ambassador to Bangladesh.
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“We will address different issues in order to qualify for GSP Plus status after we move from developing country to least developed country. “
Under the proposed GSP Plus regime, any garment that exceeds 6 percent of the total value of clothing items imported into the bloc will not benefit from the zero duty benefit and instead will be subject to the usual 12 percent tariff.
The value of total clothing imported from Bangladesh to EU countries has already passed the threshold and now stands at over 9.74% when considering the value of clothing imports in 2019.
The new proposals could be adopted in the last quarter of 2022, with the new 10-year SPG scheme coming into effect from January 2024.
“Since the EU is Bangladesh’s biggest export destination, we will start talking with them to extend the market ease,” Munshi said.
Currently, 58 percent of total Bangladesh exports and 64 percent of total clothing items are destined for the mainland.
Bangladesh is expected to lose tariffs in the EU, as it is expected to exit the LDC group in 2026. However, the EU will maintain the tariff privilege until 2029 to help the country absorb any shocks that may arise from the transition.
“Our expectation is that we get more years to enjoy the privilege of duty in the EU,” the minister said.
In order to qualify for SPG Plus status, countries will need to implement 27 international conventions relating to human rights, labor rights, environmental protection and good governance.
One of the conditions deals with the issue of child labor, but Munshi said that since Bangladesh has no child laborers, the issue was not discussed during the meeting with the EU envoy. .
Munshi also hinted at the reduction in the price of edible oil, as their prices showed a downward trend in international markets.
“There will be an impact on the prices of edible oil in local markets, as the prices of cooking oil fall in international markets. However, it may take a while before it has a major impact. “
He attributed the spiraling prices in world markets to rising prices of four widely consumed commodities, namely sugar, edible oil, onion and lentils in Bangladesh.
The majority of the demand for the four items is met by imports, as Bangladesh does not produce enough to meet the growing demand.
The price of onion has come down to some extent as the local variety has entered the market, Munshi said.
The National Board of Revenue has reduced the VAT on sugar imports to some extent in response to a recent request from the Commerce Department. However, the request for a reduction in VAT on the import of edible oil was not granted.
“The government needs revenue because it is implementing many megaprojects,” added the minister.