Generalized Scheme of Preferences (GSP) in the UK market may not be available for Bangladesh’s readymade garment (RMG) products after it graduates to a developing country as regular tariffs will be pertinent to any product when its import exceeds a set limit under the UK’s new GSP.
The post-Brexit UK’s new GSP scheme’s provision on product or goods graduation conditions that for textiles, and garment goods, graduation is applicable when the import ratio referred to exceeds 47.2%, according to the document.
The general standard of 57% implies all other goods. the list of graduated goods will be reviewed every three years.
Products graduation is the postponement of preferential rates of customs duty on specific imports succeeding products graduation valuation. These imports are considered extremely competitive and no longer need preferences to vie in the UK market.
These imports cannot profit from preferential rates and the UK Global Tariff will be put on in its place. according to the document, suspensions can be applied to goods from countries in the General Framework.
Consequently, Bangladesh’s main RMG items export rate under the GSP facility is expected to go over 47% after its graduation.
Bangladesh’s Commerce Ministry officials are still uncertain whether Bangladesh will remain to enjoy UK market access preference for an additional three years till 2029 after graduation of the LDC status in 2026.
As UK sent a form on its new GSP scheme and enquired for position papers from several countries, including Bangladesh, by 12 September.
The Commerce Ministry’s WTO Cell confirms that Bangladesh will send a position letter within the required time. Ministry will request for some easing of the conditions in the GSP.
Officials are hopeful to get GSP benefits in the UK under the Enhanced Framework after LDC graduation status.
Bangladesh will try to get an unrestricted GSP facility for the RMG export to the UK. That is why Bangladesh will request the UK to ease the condition of ‘product graduation’ in the position paper.
Experts fear that the country’s exports will hurt if Bangladesh’s competitors are among those who will sign an FTA with the UK.
Bangladesh should focus on safeguarding the existing GSP facility for an extra three years. Simultaneously, it will have to give its best efforts to waive tariffs seeing its competitiveness in the countries with which the UK will sign FTA.
