A joint study by the Research and Policy Intergration for Development (RAPID) and Friedrich-Ebert-Stiftung (FES) warns, the EU-Vietnam Free Trade Agreement (EVFTA) and Bangladesh’s graduation from Least Developing Country (LDC) status to a developing nation may cause the country’s RMG exports to the EU to decline by 20 per cent.
Presented at an event in Dhaka titled The EU-Vietnam Free Trade Agreement: Implications for Bangladesh’s Export Competitiveness, the study predicted, loss of duty-free access after 2029 may cause a 21 decline in overall exports from Bangladesh
To maintain its competitiveness, Bangladesh needs to invest in backward linkages, especially in MMFs, it needs to upgrade its infrastructure to adapt to global trade dynamics, negotiate with the EU for an extended transition period post-LDC Graduation and advocate for relaxed rules of origin under the Generalised Scheme of Preferences Plus (GSP+), recommends the report.
It also urges Bangladesh to pursue a free trade agreement (FTA) with the EU to maintain market access and leverage its strategic trade position.
To achieve the $100 RMG export target, Bangladesh also needs to sign FTAs with Japan, Singapore and other partners to diversify its exports, says M Masrur Rear, Chairman, Policy Exchange Bangladesh. The country also needs to emphasise on the use of recyclable single-fiber garments besides addressing labor union issues and workplace safety to meet EU standards, notes Felix Gerdes, Representative, FES Bangladesh.
Labor shortages in China and Vietnam provide Bangladesh with an opportunity to attact shifted orders, opine Fazleen Shamim Ehsan, Executive President, BKMEA. However, persistent challenges such as inconsistent energy supplies and inadequate banking facilities hinder growth, he adds. With strategic planning and robust reforms, Bangladesh can sustain export growth and strengthen its position in global trade.
