Look beyond garment: EU trade adviser

Bangladesh has been missing out on an opportunity to grab a bigger market share in the European Union over the last few decades due to a lack of efforts to diversify its export basket, EU trade adviser Zillul Hye Razi said yesterday. 

"The trade policy in Bangladesh has been formulated as if it is only for garments. During my long stay in the EU, nobody has come to me to relax the rules of origin (RoO) for footwear, or any other item other than garments," Razi said.

Bangladesh has an immense opportunity in increasing its earnings through the exports of leather and footwear, agro-products, ships and bicycles to EU, he said at the Business Networking Lunch organised by Bangladesh German Chamber of Commerce and Industry (BGCCI) at Westin Dhaka.

Razi, who will leave his current role in December, said Bangladesh should also focus on the leather and footwear industry during negotiations with the EU, in addition to the garment industry.

For the last 30 years, the RoO for Bangladesh's footwear exports to the EU has remained the same. As a result, local footwear exporters have to pay high duties to export to the trade bloc, he added.

The trade adviser also said any financial crisis in Europe, eventually turns into a "boon" for Bangladesh as the country mainly exports basic garment items. For example, during the financial crisis in 2008, garment exports from Bangladesh registered positive growth as it exported basic garments, Razi said.

In 2008, only Qatar and Bangladesh registered export growth in the European market as both countries supply basic items -- apparel and petro-chemicals.

In his speech, Razi ruled out the possibility of apparel work order shifts from Bangladesh to other destinations, as the EU is still heavily dependent on Bangladesh for its price competitiveness.

Bangladesh supplies around 13 percent of all the apparel items that enter the EU in a year. The country meets 25 percent of the EU markets' demand for four items -- shirts, T-shirts, sweaters and trousers.

"So shifting orders is not easy."

Bangladesh's total exports to the EU are more than $18 billion a year, of which more than $15 billion are garments.

Sakhawat Abu Khair, president of BGCCI, agreed that Bangladesh's trade policy is somehow concentrated on only the garment sector. He said his association will lobby for footwear and agro-products to get duty benefits from the EU.

BGCCI is one of the biggest bilateral business chambers in Bangladesh. It has 600 member companies from Bangladesh, Germany and Europe.

Daniel Seidl, executive director of BGCCI, and Magnus Schmid, programme coordinator of Promotion of Social and Environmental Standards in the Industry project in the GIZ Office, also spoke.