Economists see European Commission report on trade as ‘cautionary message’

Staff Reporter :
Economists see the European Commission’s recent report on trade as a ‘cautionary message’ and said Bangladesh should take it seriously.

The European Commission recently published a report expressing concern about labor and human rights in Bangladesh.

Bangladesh currently enjoys EBA (Everything but Arms) facility in the European market, which is ensuring duty-free and quota-free access to the market for all exportable goods except arms and ammunition.

There are currently 47 countries under this facility and do not have to pay the 12 per cent duty imposed on exports to these countries.

Dr Zahid Hussain, former lead economist of the World Bank’s Dhaka office, told The New Nation, “Obviously, Bangladesh should not ignore the report and should take preventive measures as the western countries have expressed their concern by maintaining legal procedures and the rules of international convention.”

“Our exporting sector is already in crisis. Businesses are failing to import goods due to the dollar crunch. A stagnated situation is prevailing in local and foreign investment. Under this circumstance, even a mild restriction will harm our economy severely,” he added.

He further said, “If the European Commission takes any harmful initiative, then it will be very difficult to recover from it as someone will fill up the gap.”

On November 21, the European Commission published this report on GSP.

This report is accompanied by a staff working document prepared jointly with the High Representative of the Union for Foreign Affairs and Security Policy.

One document has been prepared for each of the nine GSP Plus countries and only three EBA countries.

These EBA countries include Bangladesh, Myanmar and Cambodia.

The report notes that the European Union has recently “increased its engagement” with these three countries.

Prof Mostafizur Rahman, Distinguished Fellow of the research institute Center for Policy Dialogue (CPD) said, “It does not mean that they will withdraw from EBA, they have some concerns. So, we should definitely take it seriously from that point of view.”

Among the areas where action has been enhanced with these countries are some important issues which relate to the basic policies of the United Nations and the reports of the International Labor Organization.

It also expressed deep concern about the status of implementation of various suggestions of the European Parliament and Council, various international organizations, civil society and trade unions in the EBA member countries.

The current GSP rules will expire at the end of this year and the legislative process to adopt the new GSP norms is ongoing.

At this time, it is proposed to extend the period of the current rules till 2027. The European Parliament and the Council are working on the last step of the extension process.

Bangladesh exported ready-made garments worth $23.52 billion to the European Union in the last fiscal year (2022-23), according to the Export Promotion Bureau.

And it apprehended that the EU will continue to monitor Bangladesh’s implementation of the conditions for its GSP benefits closely in coming days.