Govt urges EU to help protect eight export items
Bangladesh has applied for exclusion or capping on export of eight major products exported by Pakistan to EU so that the country's export to Eurozone remains unhurt if the EU awards the proposed GSP status to Pakistan for gaining duty-free access, said a senior official of Ministry of Commerce yesterday.
The Ministry of Commerce (MoC) has submitted a letter to the European Union office in Dhaka on November 4, asking them either to exclude eight major apparel items from the list of proposed GSP plus status to Pakistan because Bangladesh's export of those eight items will be hampered due to such move, the official said.
Being a member of the Least Developed Countries (LDCs) Bangladesh enjoys the duty-free facility in EU in rules of origin (RoO) under the EU's Generalised System of Preferences (GSP).
But, Pakistan, even being a member of the developing countries, has been demanding GSP plus status at least for a few years in EU because the country was damaged by a devastating flood in middle of the year.
"Firstly, we have demanded exclusion of eight products from the list of proposed GSP plus status to Pakistan and if the exclusion is not possible to set a capping or ceiling in export volume of those products so that Pakistan pay duty after a certain quantity," the commerce ministry official said requesting anonymity.
The EU official is scheduled to place the Pakistan's plea for achieving the GSP plus status at least for two years (2011-2012) to the World Trade Organisation's general council meeting to be held in Geneva November 30, the official said. In the same meeting Bangladesh's plea is also scheduled to be considered, the official said.
The EU has recently withdrawn the GSP plus status from Sri Lanka on the ground of human rights record. Bangladesh's opportunity in export of apparel items has widened to EU for the Eurozone's for relaxing the RoO regulations, which will be effective from January 1 next year.
The biggest change is that single-stage processing (manufactured from fabric) will be allowed in many cases, instead of only two-stage processing (manufactured from yarn).
It means most apparel items from all LDCs will get duty-free access, no matter where the raw materials originate.
While speaking on export opportunities for new RoO regulations, Saiful Islam, president of Bangladesh German Chamber of Commerce and Industry (BGCCI) said any possible move to provide Pakistan duty free access to EU would hurt competitiveness of Bangladesh products in Europe.
Pakistan has sought duty free access to Europe for 64 items including eight products that are exported from Bangladesh to Eurozone, he said at a programme at The Westin Dhaka, where visiting German State Secretary of Federal Office Martin Biesel delivered speech.
Islam said Bangladeshi products, including main export earners and biggest job provider ready made garments and knitwear, leather goods and footwear get duty free benefits from Europe as an LDC.
Of the products, Pakistan has a comparative advantage in clothing and textiles due to its advantage in growing cotton.
"It took us years to get market access and develop business relations. At this time, if Pakistan gets the opportunity, our competitive advantage will erode," said Islam, also managing director of Picard Bangladesh, a leading leather goods exporter.
Islam urged the EU states to consider Bangladesh's plea in awarding the GSP plus status to Pakistan to help the country maintain growth, create jobs and cut poverty.
In a statement Algirdas Šemeta, the European Commissioner for Taxation, Customs, Anti-Fraud and Audit said: "By updating the EU's rules of origin, we will help to ensure that developing countries really benefit from the trade preferences on offer to them, and that the world's poorest don't lose out due to unnecessary complexities in our systems.”
"Bangladesh's exporters have been really looking forward to this change,” said Andrew Barnard, the head of the political, trade & information section of the EU Delegation to Bangladesh. "Under the EU's 'Everything But Arms' scheme, Bangladesh already enjoys quota-free duty-free access to the EU market for most of its exports. But from January it will be easier for them to make much greater use of imported inputs.”
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