As Bangladesh is all set for LDC graduation, it is imperative that it accelerated its efforts to meet the post-graduation challenges such as continued access to the various trade benefits including duty-free ones against its exports to the markets of advanced economies, especially the European Union (EU). Notably, as an LDC, the country has been the beneficiary of an arrangement called the Generalised System of Preference (GSP) under which it enjoys exemption of import (customs) duties on two thirds of the EU's tariff lines. But once Bangladesh joins the group of developing countries after graduation in 2026, it will lose much of these trade facilities after three years' grace period.
However, there is a special incentive arrangement called GSP+ available for vulnerable low-and-lower middle-income economies. In that case, Bangladesh will have to implement 27 international conventions related to labour and human rights, environmental and climate protection and good governance. This special incentive is for sustainable development and good governance. Naturally, following graduation, the government will be required to qualify for these facilities under GSP+ if it fulfils the conditions. Now, implementation of the labour sector reforms through revision of the country's labour laws under the proposed National Action Plan (NAP) is an important step in this direction. In this connection, outgoing head of European delegation in Dhaka, Charles Whiteley, during a recent interview with journalists, following his farewell call on Bangladesh's foreign minister, Dr Hasan Mahmud, reiterated the urgency of the issue.
The required labour law reforms under the proposed NAP involves issues including framing the country's labour law so that it is compliant with the standards of the International Labour Organization (ILO). Needless to say, those standards include freedom of association and collective bargaining right of workers and elimination of all forms of child labour by 2025. Notably, Bangladesh has been under pressure on these issues since long from different international quarters. Now, those issues have assumed a renewed importance when the country is on the verge of upgrading its status as a developing economy. Evidently, issues like ridding the country of child labour, for instance, and that too by not a distant deadline has indeed been a tall order in a populous and unequal society. Yet successive governments have been working relentlessly to address the issue to the satisfaction of the international community whose support is vital for Bangladesh's continued economic progress. Facing the prospect of Bangladesh's post-graduation loss of trade facilities it benefited from so far thanks to its longstanding trade relations with the EU under the Everything but Arms (EBA) trade regime, it has to redouble efforts to comply with their conditions. This is required to access the next most generous post-EBA arrangement, the GSP plus incentives. As the timelines for meeting the conditions of the different international conventions are drawing to a close, the government needs to expedite its work to fulfil its commitments to that effect.
The amendment to the Bangladesh's labour act is critical in this connection. Repeated reminders from the EU envoy on this subject at different discussion events arranged from time to time in the past only stress the point. Not surprisingly, a high-level European Commission monitoring mission will reportedly be visiting Bangladesh in November this year to review work progress in this regard. Since 58 per cent of Bangladesh's total export and 64 per cent of its apparel export are dependent on EU market, the government would, hopefully, be well-equipped to meet the EU GSP+ challenges.
