Bangladesh’s top apparel body the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has signed a contract with Sidley Austin LLP to obtain advisory services to extend duty-free trade benefits to the EU when Bangladesh leaves the states of least developed countries (LDCs).
Recently, the first meeting among the BGMEA, Sidley and other officials concerned was held virtually, joined by Tariff Commission and Economic Relations Division (ERD) representatives.
The Sidley lawyers will counsel BGMEA in making arguments and strategies to extend preferential market access into the European Union, with an emphasis on the ongoing EU GSP reform discussions and Brexit.
Rubana Huq, President of the BGMEA said, “Sidley Austin’s services are free of cost under its Trade for Development Initiative, Emerging Enterprises pro bono program.”
“Sidley will be supporting BGMEA to develop policy guidelines to be submitted to the govt. so that the viewpoint of the private sector is communicated to the policymakers,” Huq said.
“BGMEA wants to guarantee that the govt. representatives should also kindly be in sync with the private sector’s engagement with Sidley so that a shared view can be developed,” said Huq.
“Sidley Austin will aid the BGMEA with framing the grounds based on the government’s extended Everything But Arms (EBA) engagement request,” told Huq.
Bangladesh’s graduation from LDC to a developing nation (DC) in 2024 will end the Generalised System of Preferences (GSP) altogether – which allowed Bangladesh’s shipments duty-free access to considering its LDC status.
Though, the EU has offered a 3-year grace period on the facility following the graduation.
Bangladesh is trying to extend its current GSP status past 2027 as the local economy was cruelly shrunken from the COVID-19.
Bangladesh has been pushing with the EU through an LDC group under World Trade Organisation (WTO), with the commerce ministry asking for 10 more years past 2024.
EU is the largest export destination of Bangladesh. With total exports increased from 58% to 61% in the past 10 years.
According to a recent study by the BGMEA, Bangladesh’s major export item, the garment will lose $4 billion in export to the EU after graduation. Even with the GSP facility, the export loss will amount to $3.2 billion.
the study also showed that the dependence of Bangladesh’s exports on zero-duty benefits of the EU’s GSP has grown by 9.03% in the past 10 years to $17.15 billion in November last year.
At present, some $25 billion or 73% of external trade of Bangladesh enjoys duty-free access for the LDC status, which will end with the effect of LDC graduation.
To become eligible for the EU’s GSP Plus criteria, Bangladesh will have to ratify and effectively implemented 27 international conventions on labor rights, human rights, environmental protection and good governance.
The EU is presently revising its GSP scheme for 2023 which will be finalized soon.