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Brexit Execution: Bangladesh needs to remain engaged to retain trade benefits

Amid celebration and anti-Brexit protests, the United Kingdom finally quit from the European Union by cutting a 47 years relationship with the European members’ countries. The much-talked divorce with the EU was executed on February 1, 2020.

Figure: AT the end of the year, the UK government will declare its new independent trade policy. And it is to observe whether the British government keeps the duty and quota-free market access for Bangladesh or not.

Though UK citizens have enjoyed a lot, it raised the question as well as concerns among the countries that are exporting to the country. Brexit matters a lot for Bangladesh as a top export destination. Bangladesh export to the UK stood $4.16 billion, which is 10.29% of the country’s total exports.

After Germany, the UK is the third-largest export destination for Bangladeshi apparel goods. So, changes in trade benefits carry significant meaning for Bangladesh in retaining the market share.

Already, UK has said that after the execution of Brexit it will continue to provide trade facilities as same as it is given as a member of the European Union.

According to Export Promotion Bureau (EPB) data, in the first six months of the current fiscal year, Bangladesh’s export earnings from the UK has seen a slight fall by 0.84% to 2.03 billion, which was 2.04% in the previous year.


Reasons behind negative growth 

“As there was uncertainty among the global apparel retailers, they were conservative in placing work orders, which might cast a shadow on the imports of clothing products from Bangladesh,” Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem told the Textile Today.

On the other hand, due to Brexit uncertainty, consumers have reduced their consumption spending.  As a result; export earnings from the country saw a slight fall in the first six months of the current fiscal year, said Moazzem.

However, there is hope in returning to positive growth by the end of the current fiscal year as the UK government has promised to provide duty-free market access after the execution of the deal, he added.

What are garment manufacturers thinking?

Meanwhile, manufacturers are hopeful about the continuation of trade facilities. But they all urged the government to continue negotiation with the UK government so that they keep the provision.


“Since the UK government made it clear that it would provide the same level of European Union commitment to trade facilities for the LDCs (Least Developed Countries) even after Brexit, we are hopeful about it,” former Senior Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan said the Textile Today.

Faruque Hassan also urged the government to appoint strong lobby and engage commercial wings to push the policy so that Bangladesh enjoys the same trade facilities.

UK messages to Bangladesh

The United Kingdom (UK) sees a real opportunity to do more on trade, development and other areas in the longer term with Bangladesh, according to British High Commissioner to Bangladesh Robert Chatterton Dickson.

“There’s an increasing focus in the UK on the opportunities,” said Robert Dickson a few days ago mentioning that they will explore how they can best trade with Bangladesh.

The UK will immediately enter an 11-month transition period after Brexit, during which it will continue to obey EU rules and pay money to the EU.

As a least-developed country, Bangladesh benefits from the most favorable regime available under the EU’s Generalized Scheme of Preferences (GSP), namely the Everything but Arms (EBA) arrangement. –

EBA grants the 48 LDCs – including Bangladesh – duty-free and quota-free access to the EU for exports of all products, except arms and ammunition.

Following Brexit, the UK will be able to start talks with other countries about setting new rules for buying and selling goods and services. In the long term, he said they will be doing more, noting there are numerous business and investment interests in Bangladesh.

The High Commissioner talked about the remarkable rise of Bangladesh’s RMG industry saying overtime the comparative advantage can be damaged by competitors.

“That is why, to maintain growth, Bangladesh needs to move up the value chain and diversify its exports. And what is good for Bangladesh is also good for the UK – that is the basis of Free Trade – if our companies can supply or partner yours to help them become more competitive.”

What should the government do?

“The UK is going through a transition period after the execution of Brexit deal. So, there will be no changes in trade preferences,” Policy Research Institute (PRI) Research Director M Abdur Razzaque said the Textile Today.

So, it does not matter, whether the export earnings are positive or negative as Bangladesh now enjoys duty-free market access in the British market as it used to get when it was a member of an EU.


Currently, Bangladesh enjoys duty-free market access of all products except arms under the EBA (Everything but Arms) regime.

AT the end of the year, the UK government will declare its new independent trade policy. And it is to observe whether the British government keeps the duty and quota-free market access for Bangladesh or not, said the economist.

Since we do not know what would be the next course of action or the new trade policy, Bangladesh’s government has to remain very engaged with the UK government and carefully follow the policy so that it can retain the duty-free market access, he added.

In a referendum held on June 23, 2016, the UK decided to leave the EU as 52% of the people voted for an exit, while 48% voted to stay with the union.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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