while addressing a seminar on “Revised GSP Scheme of European Union: Implications for Bangladesh,” organised by Bangladesh Foreign Trade Institute (BFTI) at CIRDAP auditorium on Thursday, 4 September 2014.
View more news reports on the event.
Published in The Daily Star
Pakistan’s trade privileges won’t hurt Bangladesh’s exports to EU: study
Star Business Report
Pakistan’s gain of GSP Plus status from the EU authorities will not hurt Bangladesh’s exports to the EU because of the diversified products Bangladesh has, a study found.
The European parliament last year approved the Single Delegated Act under which 10 countries, including Pakistan, were allowed into the generalised system of preferences plus (GSP Plus) scheme.
The decision of the EU, the main export destination of Bangladesh, came into effect from January 1 this year.
Pakistan was awarded the GSP plus status despite being a developing country due to a massive flood which killed several hundred people and damaged huge crop lands in 2010.
It was feared that Bangladesh will lose a large chunk of its EU market share due to Pakistan’s gain on GSP facility as both are strong competitors in the EU apparel market.
Bangladesh has been enjoying duty- and quota-free status to the EU since the inception of the trade privilege by the EU in 1971.
Bangladesh will not suffer any major impact on its EU garment exports in spite of Pakistan’s GSP Plus status, Mostafa Abid Khan, director of Bangladesh Foreign Trade Institute (BFTI), said in his research paper: Revised GSP scheme of the EU: implications for Bangladesh.
Abid presented his paper at a seminar organised by the BFTI at Cirdap auditorium in Dhaka yesterday. Pakistan’s export to the EU is likely to increase by $1 billion a year, however, majority of the increase will be from trade creation, he said in the paper.
There is also a possibility of trade diversion from China, India, Bangladesh and Turkey as well, due to allotment of zero-duty benefit for 75 specified Pakistani products exported to the EU, he said.
However, trade diversion effect for all countries, including Bangladesh, is statistically insignificant, he said.
Trade diversion from Bangladesh may take place in t-shirts, jerseys, pullovers, cardigans, waistcoats and other men’s or boys’ suits of cotton, women or girls’ suits, bedding material of cotton and artificial fibre.
“The tragedies in the garment sector exposed the weakness of Bangladesh. But the compliance issues in the Bangladesh improved radically this year compared to previous years,” Frederic Maduraud, minister counsellor of EUD Bangladesh, said at the seminar.
He said this year the workers of Tuba Group were paid with proceeds from sale of the group-owner’s land, and the garment makers managed a good amount of fund for paying the workers.
Still, Bangladesh needs to improve a lot to fulfil the conditions agreed in the Sustainability Compact, signed between Bangladesh and the EU involving the International Labour Organisation in Geneva in July 8 last year, he said.
“EU wants to remain engaged with Bangladesh. But, Bangladesh needs to improve workplace safety.”
“After the inspection of almost all garment factories in Bangladesh, less than 2 percent were found vulnerable, which indicates that Bangladesh is a safe place for garment business,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, the garment makers’ apex platform.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, suggested export diversification to the EU market, as Bangladesh has the potential to export of other products to the same market.
Bangladesh could export bicycles to the EU market that is worth $1 billion annually, said Zillul Hye Razi, EU trade adviser.
“We cannot amend the rules of the EU, but we can change us so that we can enjoy the duty benefits,” said Mashiur Rahman, the prime minister’s economic affairs adviser.
People thought that Bangladesh will lose its garment business after the elimination of multifibre arrangement in January 1, 2005, but that did not happen, Rahman said.
Rather export from Bangladesh has been increasing since then, he said.
Published in Dhaka Tribune
‘Diversification will make exports competitive’
Tribune Report
Economists, analysts, entrepreneurs and business leaders spoke on the occasion
Speakers at a seminar yesterday urged Bangladeshi exporters to focus on product diversification and add more value to their products for being competitive on the global market, particularly in Europe.
“It is the high time for us to explore new opportunities in our foreign trade,” Dr Mashiur Rahman, Prime Minister’s Economic Affairs Adviser, said.
He emphasised the need of creating access to knowledge and technology to diversify products so the exports can sustain in global competition.
He was addressing the seminar on “Revised GSP Scheme of European Union: Implications for Bangladesh” at CIRDAP auditorium in Dhaka. Bangladesh Foreign Trade Institute (BFTI) organised the event.
Bangladesh depends on garment industry for 80% of its export earnings, but the industry, according to Minister-Counsel of EU delegation, is “still far behind to set working condition.”
Economists, analysts, entrepreneurs and business leaders spoke on the occasion.
They said the revised scheme may not affect Bangladesh’s export, especially in the ready-made garment (RMG) sector but in the long run the competitors like Pakistan may grab the EU market share of Bangladesh by enhancing capacity.
BFTI director Dr Mostafa Abid Khan presented the keynote paper.
During January-May, Bangladesh witnessed an 11% rise in exports to EU while Pakistan’s exports grew 17% to the market, a BFTI analysis found using figures of some certain products.
While Pakistan’s home textile export grew 27%, Bangladesh saw 3% fall.
Centre for Policy Dialogue Executive Director Mustafizur Rahman also called for diversification of and value addition to export goods to challenges in the international market.
Prime Minister’s Power and Energy Adviser Tawfiq-e-Elahi Chowdhury put stress on trade facilitation and use of knowledge and technology.
According to BGMEA president Atiqul Islam, Pakistan is more competitive than Bangladesh in the sector of woven products export.
He said: “Pakistan is increasing their capacity and building economic zones to develop industries. They are already one step ahead of us. They can produce cotton and can offer less price to EU market than us.”
Frédéric Maduraud, Minister-Counsellor, EU delegation in Bangladesh, however, criticised the Bangladeshi government’s move as the country is yet to meet the pledges given to the EU.
The pledges include ensuring labour rights and corporate social responsibility.
Frédéric Maduraud cited the failure by the government to appoint 200 additional factory inspectors. “The appointment was supposed be completed by the end of 2013. But we know this has not been completed yet.”
According to him, Bangladesh is “still far behind to set working condition in RMG sector.”
About Tuba protests, the official said the use of forces in the workers’ sit-in shocked the EU.
He said the EU parliament made the trade issues of Bangladesh on top of the priority list.
The EU companies might face legal challenges in court if they placed supply orders in Bangladeshi non-compliant factories, he said.
BFTI Chief Executive Officer Md Mozibur Rahman chaired the seminar while Additional Commerce Secretary Monoz Kumar Roy, trade adviser in EU delegation Zillul Hye Razi and BKMEA first Vice President Mohammad Hatem also addressed.
Published in New Age
LEATHER, HOME TEXTILES EXPORTS UNDER REVISED GSP IN EU
Bangladesh faces tough Pak competitions
Staff Correspondent
Bangladesh would face strong competitive pressure from Pakistan in exporting home textile and leather to the EU market due to the revised generalised system of preferences scheme of the European Union, experts said at a seminar on Thursday.
They, however, said that the revised GSP scheme created great opportunity for some other countries but their exports to the EU market were negligible and they could not affect Bangladesh.
The seminar titled ‘Revised GSP Scheme of European Union: Implications for Bangladesh’ was organised by the Bangladesh Foreign Trade Institute at the CIRDAP auditorium in the city. The European Parliament has recently given GSP Plus to 10 countries including Pakistan under Single Delegated Act with an effect from January 1, 2014.
Following the decision of the EU, Bangladeshi manufacturers apprehended that Bangladesh would lose huge market share in the EU as Pakistan developed expertise on denim and home textile. ‘For the revised preferential, Pakistan export to the EU is likely to increase by $1 billion though trade diversion from Bangladesh, China, India and Turkey and the diversion from Bangladesh may take place in T-shirt, jersey, pullover, cardigans and waistcoats,’ BFTI director Mostafa Abid Khan said in the keynote paper.
Among the 13 GSP plus beneficiary countries, only Pakistan has export similarity with Bangladesh and the high rate of the utilisation of GSP confirmed that Bangladesh was likely to have competitive pressure from Pakistan in its major export products, he said. Frederic Maduraud, minister counsellor of European Commission, said that Bangladesh fulfilled a number of commitments in the areas of workers rights, wages and factory compliance which were made after the Rana Plaza building collapse.
The EU will stay with Bangladesh and has extended its support to make the workplace safer in the readymade garment sector, he said. Bangladesh improved a lot but the country needs to improve a lot to fulfil the conditions agreed in the Sustainability Compact, he said. Mashiur Rahman, adviser to the prime minister, said that Bangladesh was going forward and all had to work together for the sustainable export growth in the EU market. He said that the work place condition in the garment sector had been improved and only 2 per cent of the factories found risky.
There is no country in the world where 100 per cent of the factories are safe, Mashiur said.
Centre for Policy Dialogue executive director Mustafiur Rahman emphasised on the value addition of the products and said that the benefits of the GSP facilities would have to be utilised for industrialisation. ‘We should also pay attention to the product diversification for full utilisation of the GSP facilities in the EU market,’ he said.
Zillul Hye Razi, economic and information officer of the European Commission delegation, said that despite GSP facilities the rate of value addition of the product was lower in Bangladesh compared with other countries. He suggested product diversification and promotion of the export of bicycle to the EU to boost export to the region.
Published in The Financial Express
New EU GSP won’t affect Bangladesh’s exports
Small impact on RMG
FE Report
Speakers at a seminar opined Thursday that new Generalised System of Preferences (GSP) of European Union (EU) will have a negligible impact on Bangladesh’s export to the EU market except a little effect on readymade garments sector.
Presenting a keynote paper on the topic, Director of the Bangladesh Foreign Trade Institute (BFTI) Dr. Mostafa Abid Khan said Bangladesh has emerged as a new competitor in the EU market. The new GSP, introduced from January 01 this year, will affect RMG sector a little, but that is not a matter of concern.
The BFTI organised the seminar titled ‘Revised GSP Scheme of European Union: Implications for Bangladesh’ at CIRDAP auditorium in the city to release findings of a study, conducted by the BFTI on revised European Union GSP.
The study examines the major changes in the revised EU GSP scheme and their impact on Bangladesh’s export by identifying the major competitors, using quantitative tools. The affected items of Bangladesh, as revealed in the study, are mainly knit and woven textile products.
In the short run, the revised scheme may not affect Bangladesh’s export, especially in the RMG sector but in the long run, competitors like Pakistan may grab the EU market by enhancing its capacity.
The EU introduced new GSP from January 1 this year which is known as GSP Plus scheme. Two components of the EU’s GSP are: Everything but Arms (EBA) for the least developed countries (LDCs) and the GSP Plus for developing countries.
Economic Affairs Advisor to Prime Minister Sheikh Hasina Dr Mashiur Rahman spoke as the chief guest at the seminar while Power, Energy and Mineral Resources Advisor Dr Tawfiq-e-Elahi Chowdhury was present as special guest.
Chief Executive Officer, BFTI Dr Md Mozibur Rahman chaired and moderated the seminar.
According to the BFTI study, Bangladesh’s export to EU market during first five months (January-May) of this year increased by 11 per cent in comparison with the same period of last year while Pakistan’s exports grew by 27 per cent for the same period. Besides, Bangladesh’s export of oven and knit products to EU market witnessed less growth than Pakistan’s export growth.
Dr. Mostafa Abid Khan found that Pakistan has used new EU GSP more effectively than Bangladesh.
“Pakistan will be the main competitor of Bangladesh in the EU market and our country may face pressure in the coming days,” he said adding that home textile products will be the main victim of the new system.
The BFTI study says among the seven RMG exporting countries, Pakistan will benefit at the highest level.
Pakistan’s export may rise to US $1 billion due to the new GSP. But 70 per cent of Pakistan’s export will come from trade creation and rest 30 per cent from trade diversion,” Dr. Mostafa Abid Khan said.
He said of this 30 per cent, Pakistan will gain from China, India, Turkey, Bangladesh and Sri Lanka’s losing share from the new system.
The study said a negligible volume of trade diversion from Bangladesh may take place in case of products like T-shirt, jerseys, pullover, cardigans, waistcoats, men’s or boys’ suits of cotton, women or girls suits, bed lined of cotton, bed linen of man-made fibre, and bed linen.
The study says the GSP Plus scheme has created opportunity for 35 countries to avail the scope of exporting goods to the EU with tariff concession but Bangladesh may face competition in leather and home textile sectors.
Dr. Mashiur Rahman said there is no country in the world where 100 per cent factories are safe.
“According to Accord and Alliance examination result of RMG factories, only 2 per cent factories have been found unsafe,” he said adding that this two per cent is very much acceptable.
He also urged all to work together to improve the working conditions in the country’s RMG industry.
The Advisor said if Bangladesh wants to be empowered in global trade it should have more new sectors.
Dr Tawfiq-e-Elahi Chowdhury said Bangladesh now should look at the high-tech products along increasing productivity of quality industrial production.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Atiqul Islam said GSP facility in the EU market is very much important for the country’s RMG industry.
He said the RMG sector had faced serious difficulty following Rana Plaza collapse and after-effects of the disaster.
He also blamed media propaganda for the RMG situation in the country and abroad.
Minister Counsellor of Head of Section at the EU mission in Dhaka Frédéric Maduraud expressed his satisfaction over various initiatives taken following the Rana Plaza disaster.
Talking about Toba Group, he said it is a big change that the owner of the factory had to sell his land to pay the due wages to the workers.
“The organisation took this initiative and paid wages to the workers, which is a very big positive change,” he said.
CPD Executive Director Mustafizur Rahman said despite GSP facilities, Bangladesh’s exports to the EU countries will rise more if political unrest does not continue.
A good quantity of orders may be shifted to other competitor countries due to production and supply disruption in Bangladesh for the disruptive political situation, he added.
First Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said as the EU is the key RMG market of Bangladeshi apparel products, the market has to be kept open for Bangladesh.