The trade body has conveyed its concern to the EU over a specific article of the new post-2023 GSP regulation proposal related to the automatic safeguards applied to textile and readymade garment (RMG) products.
If the proposed rules are not changed, Bangladesh could face most-favoured-nation (MFN) tariffs and the suspension of zero-duty benefits for its apparel items in the EU market, it noted.
EuroCommerce, the European body representing the retail and wholesale sectors, has claimed that the safeguard measures proposed in the new EU Generalised Scheme of Preferences would severely affect Bangladesh.
If these are not changed, Bangladesh could face most-favoured-nation tariffs and the suspension of zero-duty benefits for its apparel items, it noted.
EuroCommerce has expressed hope that the EU can consider a targeted and technical solution to mitigate the possible negative impact on Bangladesh due to the new GSP regulation proposal.
It has requested negotiations on the new GSP regulation and fears that hundreds of thousands of RMG workers in Bangladesh are at risk of losing jobs. Additionally, the proposed measures could jeopardise the sustainable development of the sector.
A transition period for countries that join GSP plus post-graduation from the least developed country (LDC) status prior to activation of the automatic safeguards should be introduced to give more time to beneficiary countries and economic operators to adjust, EuroCommerce has suggested.
It has also cited that increasing the threshold for triggering automatic safeguard measures on RMG products from the proposed 37 per cent to the current level of 47 per cent would have a dampening effect, media outlets in Bangladesh reported.
With the proposed article, if Bangladesh’s share of S-11b products (of the combined HS Sections 61, 62, and 63, comprising knitwear, woven, and home textile items) as a percentage of all EU GSP-covered imports exceeds the suggested threshold of 37 per cent, the automatic safeguard measures will be triggered, according to the letter sent by EuroCommerce.
“The corresponding Bangladesh share is estimated to be almost 50 per cent. It means there is a significant risk that the automatic safeguard measures will suspend the zero-duty benefit for ready-made garments products (woven, knit, home textiles) before the end of this decade,” the letter said.
The Bangladesh mission in Sweden recently sent the EuroCommerce letter to the country’s commerce ministry to chart out the next course of action.
“If alternative destinations for some part of the production will be available by then, we might see an exodus of international brands with a negative impact on the Bangladesh overall GDP,” the letter noted.
“We also fear there is a risk reducing the incentives for Bangladesh to keep working on the reform path ahead, which is strictly linked with the actual possibility to have a preferential access to the European market. Some of the sustainability standards developed over years of hard work might also be at risk,” EuroCommerce director general Christel Delberghe mentioned in the letter.
The EU GSP facility will end this December, and a new GSP scheme will be effective from January 01 for 2024-2034.
Fibre2Fashion News Desk (DS)
