Increasing exports to Korea

A recent dialogue on the South Korean market revealed some interesting facts. Although Bangladeshi products enjoy duty-free access to the Republic of Korea (ROK), 'rules of origin' dictate that our products have higher local content. This stipulation alone has become a stumbling block for a great many products to take advantage of market access to one of the fastest growing economies of the world. Trade experts in the country contend that although Bangladesh enjoys similar duty free access to other markets like the European Union but there is no such condition on products having been made with imported materials. That Bangladeshi products must have 40 per cent local content is a major sticking point in increasing trade between the two countries. That we export less than $350 million per annum to the country out of a total export basket worth $30 billion speaks volumes of the problem at hand.

Korean representatives differ on the issue stating that the 40 percent clause is not that high and should be looked upon as an opportunity rather than a hindrance. Yet, trading data show that markets that do not put so much emphasis on local content have become a boon for our exporters. This is true for neighbouring Japan where exporters raked up more than $860 million in fiscal 2013-14, an increase of nearly 15 percent over the previous financial year. It is abundantly clear that unless these rules are eased, the country cannot take advantage of the duty free access provided by the ROK to Bangladesh.