New EU GSP won\\\'t affect Bangladesh\\\'s exports

Speakers at a seminar opined Thursday that new Generalised System of Preferences (GSP) of European Union (EU) will have a negligible impact on Bangladesh's export to the EU market except a little effect on readymade garments sector.
Presenting a keynote paper on the topic, Director of the Bangladesh Foreign Trade Institute (BFTI) Dr. Mostafa Abid Khan said Bangladesh has emerged as a new competitor in the EU market. The new GSP, introduced from January 01 this year, will affect RMG sector a little, but that is not a matter of concern.
The BFTI organised the seminar titled 'Revised GSP Scheme of European Union: Implications for Bangladesh' at CIRDAP auditorium in the city to release findings of a study, conducted by the BFTI on revised European Union GSP.
The study examines the major changes in the revised EU GSP scheme and their impact on Bangladesh's export by identifying the major competitors, using quantitative tools. The affected items of Bangladesh, as revealed in the study, are mainly knit and woven textile products.
In the short run, the revised scheme may not affect Bangladesh's export, especially in the RMG sector but in the long run, competitors like Pakistan may grab the EU market by enhancing its capacity.
The EU introduced new GSP from January 1 this year which is known as GSP Plus scheme. Two components of the EU's GSP are: Everything but Arms (EBA) for the least developed countries (LDCs) and the GSP Plus for developing countries.
Economic Affairs Advisor to Prime Minister Sheikh Hasina Dr Mashiur Rahman spoke as the chief guest at the seminar while Power, Energy and Mineral Resources Advisor Dr Tawfiq-e-Elahi Chowdhury was present as special guest.
Chief Executive Officer, BFTI Dr Md Mozibur Rahman chaired and moderated the seminar.
According to the BFTI study, Bangladesh's export to EU market during first five months (January-May) of this year increased by 11 per cent in comparison with the same period of last year while Pakistan's exports grew by 27 per cent for the same period. Besides, Bangladesh's export of oven and knit products to EU market witnessed less growth than Pakistan's export growth.
Dr. Mostafa Abid Khan found that Pakistan has used new EU GSP more effectively than Bangladesh.
"Pakistan will be the main competitor of Bangladesh in the EU market and our country may face pressure in the coming days," he said adding that home textile products will be the main victim of the new system.
The BFTI study says among the seven RMG exporting countries, Pakistan will benefit at the highest level.
Pakistan's export may rise to US $1 billion due to the new GSP. But 70 per cent of Pakistan's export will come from trade creation and rest 30 per cent from trade diversion," Dr. Mostafa Abid Khan said.
He said of this 30 per cent, Pakistan will gain from China, India, Turkey, Bangladesh and Sri Lanka's losing share from the new system.
The study said a negligible volume of trade diversion from Bangladesh may take place in case of products like T-shirt, jerseys, pullover, cardigans, waistcoats, men's or boys' suits of cotton, women or girls suits, bed lined of cotton, bed linen of man-made fibre, and bed linen.
The study says the GSP Plus scheme has created opportunity for 35 countries to avail the scope of exporting goods to the EU with tariff concession but Bangladesh may face competition in leather and home textile sectors.
Dr. Mashiur Rahman said there is no country in the world where 100 per cent factories are safe.
"According to Accord and Alliance examination result of RMG factories, only 2 per cent factories have been found unsafe," he said adding that this two per cent is very much acceptable.
He also urged all to work together to improve the working conditions in the country's RMG industry.
The Advisor said if Bangladesh wants to be empowered in global trade it should have more new sectors.
Dr Tawfiq-e-Elahi Chowdhury said Bangladesh now should look at the high-tech products along increasing productivity of quality industrial production.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Atiqul Islam said GSP facility in the EU market is very much important for the country's RMG industry.
He said the RMG sector had faced serious difficulty following Rana Plaza collapse and after-effects of the disaster.  
He also blamed media propaganda for the RMG situation in the country and abroad.
Minister Counsellor of Head of Section at the EU mission in Dhaka Frédéric Maduraud expressed his satisfaction over various initiatives taken following the Rana Plaza disaster.
Talking about Toba Group, he said it is a big change that the owner of the factory had to sell his land to pay the due wages to the workers.
"The organisation took this initiative and paid wages to the workers, which is a very big positive change," he said.
CPD Executive Director Mustafizur Rahman said despite GSP facilities, Bangladesh's exports to the EU countries will rise more if political unrest does not continue.
A good quantity of orders may be shifted to other competitor countries due to production and supply disruption in Bangladesh for the disruptive political situation, he added.
First Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said as the EU is the key RMG market of Bangladeshi apparel products, the market has to be kept open for Bangladesh.