Bangladesh nears graduation milestone
The European Union is “carefully assessing” a request to negotiate a free trade agreement with Bangladesh, the bloc’s ambassador to Dhaka said Wednesday, as the country edges closer to graduating from least developed country status and faces the prospect of losing preferential trade access to its largest export market.
“Bangladesh is approaching a critical milestone of LDC graduation and needs to establish a more eye-to-eye commercial relationship with the European Union,” said Michael Miller, EU Ambassador to Bangladesh, speaking at a seminar on circular transition in the textile industry held at Hotel InterContinental in the capital.
The remarks signal a potentially significant shift in the trade architecture between Bangladesh and the EU, which currently absorbs the bulk of the country’s garment exports under concessional terms tied to its LDC status.
Miller urged Bangladesh not to wait for graduation to arrive before acting. He called on Dhaka to use the remaining time before the transition to stimulate investment, remove what he described as trade irritants — including discriminatory practices — and ensure predictable market access to the EU.
“Regardless of the graduation timeline, Bangladesh should plan ahead to boost competitiveness, circularity and eco-efficiency,” he said.
The seminar, titled Accelerating Circular Transition in Bangladesh’s Textile Industry: Insights from SWITCH2CE Pilots, was jointly organised by the Ministry of Commerce and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Much of Miller’s address focused on the EU’s push for a circular economy — a model designed to decouple economic growth from resource consumption and achieve carbon neutrality by 2050.
He quoted European Commission President Ursula von der Leyen’s call to move away from the “take-make-waste” model toward reuse and sustainability.
The textile and garments sector, he said, is a priority for this transition given its scale and waste footprint. The EU produces over five million tonnes of textile waste annually; Bangladesh generates around 600,000 tonnes each year.
The EU’s 2022 strategy for sustainable and circular textiles includes eco-design requirements, mandatory digital product passports, extended producer responsibility schemes and stricter rules against greenwashing.
“These policies matter for Bangladesh, as Europe is your largest export market, dominated by RMG products,” Miller said. Bangladesh’s garment sector contributes roughly 11% to GDP and employs around four million workers.
The ambassador outlined a range of EU-backed initiatives already underway in Bangladesh. Under the SWITCH to Circular Economy (SWITCH2CE) project, co-funded with Finland’s Ministry for Foreign Affairs, brands including H&M and Bestseller are piloting textile recycling schemes, improving sorting of blended waste and tracking post-industrial scrap. UNIDO and Chatham House are supporting policy development alongside the Ministry of Commerce and BGMEA.
The European Investment Bank has signed a €60 million loan agreement with BRAC Bank to finance circular investments for small and medium enterprises. Additional advisory support is being provided through SWITCH-Asia to help governments develop sustainable consumption and production policies.
“We are investing in the greening of Bangladesh’s power sector because circularity requires clean energy,” Miller said, adding that the EU also plans to invest in upskilling workers with green competencies.
The event was chaired by Commerce Secretary (routine charge) Md Abdur Rahim Khan. Commerce Minister Khandaker Abdul Muktadir and BGMEA President Mahmud Hasan Khan also addressed the seminar.
Bangladesh is currently on course to graduate from LDC status — a transition that would end its access to the EU’s Everything But Arms trade scheme, under which garments currently enter duty-free.
Securing a successor arrangement, whether through an FTA or other mechanism, has become one of the country’s most consequential trade policy challenges in the years ahead.
