Dhaka set to receive boost in export of RMG items

[TopCat]

Export of ready-made garment (RMG) products from Bangladesh will get a boost as the US House of Representatives approved a bill to shield US companies and workers against China's currency practices.

The bill will allow Washington to impose countervailing duties on governments that manipulate exchange rates deviating from free trade rules.

"There will be no immediate benefit, but in the medium term the garments sector will gain more competitiveness as China will have to appreciate its currency," executive director of Centre for Policy Dialogue (CPD) Dr Mostafizur Rahman told the FE.

If China appreciates its currency, its exportable products will become expensive.

China is gradually appreciating its currency and during the last three years yuan was appreciated by about 15 per cent, Dr Rahman said.

"If yuan is appreciated by another 15 per cent during the next three years, it will be a big boost for Bangladesh exports," he said.

About 80 per cent of the total export earnings of the country come from the RMG sector.

Dr Rahman, however, said it might leave an adverse impact on the import front.

"Bangladesh imports about $3.4 billion worth of products from China and it will become costlier after the appreciation of the Chinese currency," he explained adding, "Bangladeshi importers will need to find alternative cheap sources for import."

Former BGMEA president Anwar Ul Parvez said if China makes its currency strong, local exporters will not be benefited in the short-term but in the mid-term the prices will be increased.

The country has immense prospects and the government and local exporters should capitalise on the opportunities, he added.

"Other than currency appreciation, China is facing acute workforce problems as Chinese workers are no longer interested in working in the RMG sector," Mr Parvez said.

The government should immediately take steps to improve infrastructure and the power situation to increase production in the sector, he said.

"Currency appreciation in China or any other external developments will not be of any help to Bangladeshi manufacturers unless the port and power situation improves," he added.

The currency bill, a new trade tool to the US administration, clears the way for the Commerce Department to apply countervailing duties against imports from countries with fundamentally undervalued currencies.

The US government could consider currency undervaluation of a country as an export subsidy and impose countervailing duties of the same amount.

Bangladesh exported about $12 billion's worth of RMG products during the last fiscal and this year the government has set a target of $12.5 billion in the sector.
Dhaka set to receive boost in export of RMG items

 

[TopCat]

Dhaka, Washington to sign deal on uniform compliance in RMG

The US has come forward to address the country's labour issues in export-oriented readymade garment (RMG) industry and bring uniformity in compliance requirements of foreign buyers under a proposed 'Better Work Program (BWP)'.

The programme will be coordinated jointly by International Finance Corporation (IFC) and International Labor Organisation (ILO), which will be supported by multi-donor efforts later, officials in the Ministry of Foreign Affairs (MoFA) and Ministry of Commerce said.

An agreement will be signed between Dhaka and Washington soon to implement the BWP in the RMG sector, a top MoFA official said.

Besides, a tripartite agreement will also be signed between the government, BGMEA and ILO/IFC to initiate the programme in the country, the official added.

The local major stakeholders -- Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and trade union leaders of the sector -- have supported the move of the US, the largest export destination of Bangladeshi apparel.

The US Department of Labor has recently submitted a proposal on the issue to MoFA. Based on the proposal, the Ministry of Commerce (MoC) organised a meeting last week to seek cooperation from relevant ministries and stakeholders, it is learnt.

"Both the government and stakeholders accepted the US proposal of BWP in the garment sector, which will serve the purposes of exporters, buyers and labourers as the approach will improve the labour compliance and competitiveness in RMG sector," a top MoC official said.

"The comprehensive formula of BWP is a solution to all stakeholders of RMG under one umbrella."

A meeting was held recently at the MoC with representatives from different government ministries, workers leaders, BGMEA and BKMEA to a comprehensive discussion on the issue.

BGMEA leaders said they have long been tormented by compliance and stringent auditing requirements of buyers, which are often different from buyer to buyer causing hassle and extra costs for garment owners.

"The BWP will ensure compliance requirements of both labour and buyers. We support the move," Shafiul Islam (Mohiuddin), Senior Vice-President, BGMEA, told the FE on Thursday.

'The programme introduced in Vietnam, Jordan, Lesotho and Haiti has resulted in establishment of good image for the RMG industries of the countries concerned as foreign buyers are assured of compliances by the suppliers."

A uniform compliance if finalised by major donors and ILO, the global buyers will be satisfied and will easily rely on sourcing from Bangladesh, Mohiuddin said.

Bangladesh exported RMG worth$12.35 billion in fiscal 2008-2009 with the total value of exports to the US recording at $3.6 billion, according to the statistics of Export Promotion Bureau.

The proposal of US Labor Department said the BWP if implemented in the RMG sector of Bangladesh it would benefit workers, buyers and exporters.

"In Bangladesh, expected benefits could include improvement of compliance with labor standards and safety laws, improved reputation of the Bangladesh RMG sector with international buyers and consumers, reduction in the number of audits, achievement of labor peace, and improvement in productivity and quality to help ensure that the RMG sector remains competitive," reads the proposal of the US Labor Department.

"Trading partners such as the United States and international buyers increasingly expect compliance with labor laws and international labor standards in traded sectors. At the same time, it is in the interest of Bangladesh to improve labor compliance because it contributes to broad-based economic development and social stability."

Officials in the MoFA said after signing the agreement between Bangladesh and the US, the MoC, Ministry of Labor and Employment and the Economic Relations Division will be involved in implementing the agreement. Besides, the multi-donor agencies, the US Department of Labor will fund the initiative significantly at its initial stage

Dhaka, Washington to sign deal on uniform compliance in RMG

 

[akash57]

Bangladesh apparel exports surge as EU buyers shift from Sri Lanka: report

Oct 08, 2010 (LBO) - Bangladesh's exports of apparel are surging beyond projections as buyers from the European Union shifted orders ahead of Sri Lanka losing preferential duty concessions, a media report said.
Sri Lanka is losing duty free entry to the EU of garments and a number of other exports this year over a state failure to fully implement international laws that protect human rights and political and civil liberties of its citizens.
Bangladesh had exported knitwear worth 1.6 billion US dollars against a 1.21 billion target set for July and August 2010 which was up 31 percent from a year earlier, Bangladesh' The Daily Star newspaper reported.

Bangladesh had exported woven garments worth 1.31 billion US dollars in July and August against a target of 1.12 billion, up 17 percent from a year earlier.

The report quoting Ahsan Kabir Khan, managing director of Bangladesh's Interfab Shirt Manufacturing Ltd said there was a recovery of the global economy and a shift of orders from other buyers.

Orders, which were supposed to go to Sri Lanka, are now coming to Bangladesh, the newspaper quoted Khan as saying.

Pakistan was also losing orders due to flooding and China due to higher labour costs, the report said. The report said Bangladesh was also more competitive.

Sri Lanka has exported 268.1 million US dollars of apparel in July 2010, down 11 percent from 301.3 million US dollars a year earlier. Year to date exports were down only 3.9 percent to 1,766.8 million US dollars, according to official data.
The Daily Star said Bangladesh was also more competitive.

The GSP+ was expected to end from the third quarter of 2010. In recent years Sri Lanka's exports to the EU has grown helped by the GSP+ concessions, while exports to the US, to whose currency the rupee is pegged weakened.

Bangladesh apparel exports surge as EU buyers shift from Sri Lanka: report - LANKA BUSINESS ONLINE

 

[Stealth_fighter]

good to hear that...mashallah