Simplified market access to EU cheers export industry

Kazi Azizul Islam
The export industry is upbeat about the EU, the largest market destination for Bangladesh, simplifying market access to the LDCs from January 1.
For Bangladesh’s apparel industry, simplification of market access would mean attires made of imported fabrics or less of value addition would get duty free access to Europe.
More than two thirds of Bangladesh’s export shipments are destined to European countries and they imported $5.72 billion worth of Bangladeshi goods out of $8.3 billion, the entire exports in five months of the current fiscal in November.
Until now, more than 90 per cent of Bangladeshi knitwear shipments enjoyed duty-free access to EU but around one third of the shipments of woven or cut and sewn apparels did not enjoy the facility.
With the Europeans leaning to diversify imports from Bangladesh and buy high value apparels from it due to costing, some in the industry, however, are for raising the prices for the Europe bound shipments for the development of the industry and its workers.
Zillul Hye Razi trade adviser to the delegation of the European Commission in Dhaka described the EU decision to simplify the import regime from the LDCs as the beginning of a new chapter.
He called it a liberal market access for Bangladesh and other LDCs to the European market.
Razi said new EU trade regime would provide duty free market access to non-textile exports as well.
Sayeeful Islam, chairman of the Concorde Garments Group, a leading exporter of shirts, said that simplified market access created a new opportunity to export to Europe high value products.
He, however, advised that the exporters need to remain rationally aware that the EU measure aimed at the development and welfare of the industry and workers in the LDCs.
He said explaining that if a shirt made in Bangladesh cost a European buyer $5.65 with 13 per cent duty earlier, from January 1 it would cost $5.
He said that the industry needed to develop negotiating skills if wanted justify why wanted to increase the price of export products.
The Centre for Policy Dialogue executive director, Professor Mustafizur Rahman, described the new EU trade regime as a ‘golden opportunity’ for Bangladesh.
‘It would,’ he said, ‘open up newer opportunities for the export of apparels, especially of woven and high value knitwear and outerwear as well as non-textile products.’
But he cautioned that the scope to import fabrics and yarns, it would create, could take away the competitive edge of the domestic backward linkage textile industries.
He, therefore, advised the government to provide cash incentives and other support measures to encourage the use of local fabrics and yarns.
Professor Mustafiz also advised the government to enhance trade facilitation service to the exporters so that they could overcome all non-tariff barriers to exploit the diverse high value marketing opportunities in the EU.