Securing EU GSP-plus benefits

As Bangladesh is set to graduate to the status of a developing country, qualifying for the new EU preferential scheme dubbed GSP-plus is crucial for the country's exports. Although as a least developed country (LDC) Bangladesh has been a beneficiary of the EU-GSP by way of zero duty, continuation of the benefit under GSP+ in the post-graduation period is contingent upon fulfilling specific preconditions, particularly related to labour and human rights issues.
GSP+ is a special incentive package for sustainable development and good governance of vulnerable developing countries, subject to ratification and implementation of more than 30 international conventions on human rights, labour rights, environmental protection and climate change, and governance issues. Vulnerable countries here refer to those suffering from a lack of export diversification and insufficient integration within the international trading system. GSP+ grants full removal of tariffs on over 66 per cent of EU tariff lines. Upholding the GSP+ status, especially regarding effective implementation and compliance with reporting obligations of the conventions, is managed by EU monitoring. The EU engages in a dialogue with authorities and stakeholders in beneficiary countries and also arranges frequent monitoring missions to those countries. It has been learnt that the European Commission (EC) has expressed concern over limited progress of the National Action Plan (NAP) of the Bangladesh government in ensuring compliance in this regard. The NAP covers broadly nine issues, including framing Bangladesh labour law in compliance with the ILO standards on freedom of association and collective bargaining, and elimination of child labour in all its forms by 2025. The EC, while communicating its concern, has reportedly stated that full implementation of the NAP will be the key criteria in the assessment of possible GSP+ eligibility for Bangladesh.
At a seminar held this week in Dhaka organised by the International Business Forum, the Head of Delegation of the European Union to Bangladesh reiterated Bangladesh's obligation to implement the international conventions in order to access GSP+ after graduating from least developed country status. No doubt a challenging job, compliance as required under terms of the new EU scheme is an imperative for access to the EU market-the single largest export market accounting for well over 52 per cent of the country's total exports.
Under the existing GSP scheme, the "zero duty access" to the EU will be available for three years following the official announcement of Bangladesh as a developing country. If the existing preferences are not available after the transition time, exports from Bangladesh would face 8.7 per cent duty on an average. As a result, it is estimated that shipments would drop at the rate of 5.7 per cent per year. To mitigate these adverse effects, Bangladesh has no choice but to take all necessary measures to qualify for GSP+ as well as to preserve its competitiveness in the export market. In essence, continuation of the tariff preference after LDC graduation is extremely vital for the sustenance of the country's export sector.