The revised GSP scheme of the European Union which will come into force on January 1, 2014 may create a favourable competitive environment for Bangladeshi exports to the region due to reduction of the number of beneficiary countries and product coverage, a government study revealed. ‘The revised generalised system of preferences scheme may not be a cause of serious threat to exports from Bangladesh to EU markets, rather, it may create a lesser competitive environment for the country,’ the report conducted by Bangladesh Tariff Commission said.
The BTC submitted the report to the commerce ministry last week.
Earlier in January, Bangladesh embassy in Brussels, Belgium had said that tariff preferences Bangladesh are enjoying in the European markets under GSP facility might be eroded in future if Pakistan, Philippines and Sri Lanka get GSP plus facility under the revised scheme.
It had said Pakistan, Sri Lanka and Philippines might be strong competitors of Bangladesh by getting duty-free export facility to the markets of European countries under the GSP plus scheme.
In October last year, the EU declared its revised GSP.
The EU will grant three kinds of tariff preferences — standard GSP, GSP plus and everything but arms — to the developing and least developed countries under the GSP scheme.
Under the standard GSP facility, 40 developing countries including Asian nations China, India, Indonesia, Pakistan, Sri Lanka, Thailand and Vietnam will get reduced duty facility for 66 per cent of their products.
Under the GSP plus scheme, 35 poor and vulnerable countries including Pakistan, Sri Lanka and Philippines will be eligible to get duty waiver for their 66 per cent or 6,300 products in exporting to EU markets subject to fulfilling certain conditions.
These countries, now enjoying preferential market access, will have to ratify and implement international conventions relating to human and labour rights, environment and good governance.
Under the everything but arms scheme, 49 least developed countries — 10 from Asia including Bangladesh, Nepal, Bhutan, Afghanistan, Cambodia and Myanmar, 33 from Africa, five from Australia and Pacific and one from Caribbean regions — enjoy duty-free and quota-free export facility for all of their products except arms and ammunitions.
Bangladesh embassy in Brussels, which represents the country to the EU, had said if the countries were granted the facility, around 6,300 products of the countries would get duty-free market access to the EU markets.
The BTC study said, ‘Similarity between the exportable products of the two countries (Pakistan and Sri Lanka) and those of Bangladesh is not so high. That indicates that Bangladesh’s export to the region will not face any serious threat,’ the report said.
‘Rather, reduction of beneficiary countries to 89 from 176 and reduction in product coverage may create a lesser competitive environment for the Bangladesh’s export,’ it said.
The outcome, however, will mostly depend on how properly Bangladesh can utilise the opportunity such as diversification of its export baskets as the country currently exports only limited products mainly readymade garments and frozen foods, the report stated.
The 27-nation bloc EU is the largest destination of the Bangladesh’s exports particularly exports of readymade garments. The RMG sector exported products worth around $12 billion in 2012 to the destination.
The EU is the Bangladesh’s main trading partner, accounting for around 12 per cent of the country’s total trade. Clothing items constitute ninety per cent of EU imports from Bangladesh, EU data showed.
-With New Age input
