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EuroCommerce: Proposed GSP regulation jeopardizes Bangladesh economy
The ongoing EU GSP facility will end this December, and a new GSP scheme will be effective from January 01 for 2024-2034
Tribune Desk
Published: April 26, 2023 7:24 AM | Last updated: April 26, 2023 7:25 AM
The measures proposed in the European Union's (EU) new GSP regulation would severely affect Bangladesh's overall economy, according to EuroCommerce – the principal European organization representing the retail and wholesale sector.
It notes that if the proposed rules remain untouched, Bangladesh could face most-favoured-nation (MFN) tariffs and the suspension of zero-duty benefits for its apparel items in the EU market.
EuroCommerce, a platform representing over 5 million companies in the European retail and wholesale sector, expressed concern to the EU over a specific article of the new GSP regulation proposal connected to the automatic safeguards applied to textile and readymade garment (RMG) products.
The ongoing EU GSP facility will end this December, and a new GSP scheme will be effective from January 01 for 2024-2034. The EU parliament is now reviewing the new GSP regulation.
In the new GSP, duty-free market access to the EU market might be subjected to fulfilling difficult conditions.
It has also proposed to bring product graduation and rules of origin under strict conditions after 2026.
The platform has already requested negotiations on the new GSP regulation and fears that hundreds of thousands of RMG workers are at risk of losing their jobs.
Additionally, the proposed measures could jeopardize the sustainable development of the sector.
The principal European organization has urged the EU to launch trialogue discussions on the new regulation without further delay.
It believes that it is essential for Bangladesh to maintain preferential access to the European market after 2029, considering the expected graduation of Bangladesh from the Least Developed Countries (LDC) category.
EuroCommerce suggested that a transition period for countries that join GSP plus post-graduation from LDC prior to activation of the automatic safeguards should be introduced to give more time to beneficiary countries and economic operators to adjust.
It has also cited that increasing the threshold for triggering automatic safeguard measures on RMG products from the proposed 37% to the current level of 47% would have a dampening effect.
According to the letter, with the proposed article, if Bangladesh's share of S-11b products (of the combined HS Sections 61, 62, and 63, comprising knitwear, woven, and home textile items) as a percentage of all EU GSP-covered imports exceeds the suggested threshold of 37%, the automatic safeguard measures will be triggered.
The corresponding Bangladesh share is estimated to be almost 50%. It means there is a significant risk that the automatic safeguard measures will suspend the zero-duty benefit for ready-made garments products (woven, knit, home textiles) before the end of this decade, the letter said.
Currently, Bangladesh's products have duty-free market access to 38 countries.
Of the countries, 27 are the EU member-states.
The EU is Bangladesh's largest export destination.
Bangladesh has been enjoying duty-free facilities for exporting goods to different EU countries since 2001 under the Everything But Arms (EBA) scheme.
Around 50% of Bangladesh's export earnings come from the bloc.
The country exported goods worth $23 billion to the bloc.
EuroCommerce: Proposed GSP regulation jeopardizes Bangladesh economy
The ongoing EU GSP facility will end this December, and a new GSP scheme will be effective from January 01 for 2024-2034
