Bangladesh wants study, data-based trade deal with EU
Bangladesh wants to sign an Economic Partnership Agreement (EPA) with the European Union (EU), albeit after conducting a feasibility study and reviewing bilateral trade data, Commerce Adviser Sk Bashir Uddin said yesterday.
The adviser made the statement following a meeting with Michael Miller, ambassador and head of the delegation of the EU in Bangladesh, at the commerce ministry in Dhaka.
Miller said that signing an EPA with the EU could offer significant benefits for Bangladesh, as the EU remains the country's largest trading partner.
He also noted that there is a significant gap in bilateral trade between Bangladesh and the EU, as the former exports more goods than it imports.
Both Bangladesh and the EU have the opportunity to grow together by increasing trade and investment, he said.
Bangladesh has been negotiating with major trading partners to sign preferential trade deals such as EPAs, Comprehensive Economic Partnership Agreements (CEPAs), and Free Trade Agreements (FTAs).
The deals are aimed at securing zero-duty trade benefits once Bangladesh graduates from the least developed country (LDC) category to a developing one in November next year.
The EU is the largest trading bloc for Bangladesh, where goods worth more than $25 billion are exported annually — accounting for over 60 percent of the country's total merchandise exports.
Concurrently, Bangladesh has also been negotiating with the EU to secure GSP Plus status to enjoy zero-duty trade benefits after LDC graduation.
This is because the current tenure of the GSP status enjoyed by Bangladesh under the LDC category will come to an end in 2029.
The EU provides duty-free trade benefits for an additional three years after a country graduates, allowing a grace period to ensure a smooth transition.
If Bangladesh, however, wants to avail itself of the GSP Plus status, it will have to sign 32 international conventions, including four core ones covering human rights, environmental protection, labour rights, and good governance.
So, Bangladesh prefers signing a trade deal to avail itself of GSP Plus status for the long term alongside sustainable trade benefits.
However, Bangladesh's record of signing trade deals is poor. So far, the country has managed to sign only one preferential trade agreement — with Bhutan in December 2020.
"We want to sign the EPA with the EU, and we are ready to start negotiations if the EU responds to our call for the EPA," Commerce Secretary Mahbubur Rahman told The Daily Star over the phone after the meeting.
During yesterday's meeting, the EU ambassador also mentioned some non-tariff issues, including those involving Chattogram port and the sourcing of pharmaceutical products from Bangladesh, the secretary said.
Almost all the issues raised by the EU ambassador and ambassadors of a few other EU countries accompanying Miller to the meeting are related to other ministries, Rahman added.
At present, Bangladesh enjoys duty-free access to the EU. The EU has already granted the country a three-year extension of zero-duty facilities until 2029.
After that, exporters will face tariffs of about 12 percent in the absence of an agreement. The country's major competitors in exports, such as India and Vietnam, have already signed FTAs with the bloc.
Garments are the main export item to the EU. Currently, around 64 percent of Bangladesh's annual garment exports are destined for the EU.
If the country cannot secure either GSP Plus status or an EPA, the garment sector will face serious challenges after LDC graduation.
