The graduation of Bangladesh from its least-developed country (LDC) status poses both opportunities for rebranding itself and challenges of losing trade preferences, according to them.
After 2026, the Bangladeshi-made goods will face 10-12 per cent duty, although the duty preference from the European Union will stay up to 2029 as a grace period.
The observations and recommendations were made at a session styled “Bangladesh’s LDC Graduation-Impediments and Way forward” at Dhaka Apparel Summit in “Made in Bangladesh Week 2022” held at International Convention City Bashundhara on Wednesday.
BGMEA director Asif Ashraf moderated the session.
At the event, prime minister’s principal secretary Dr Ahmad Kaikaus said, “There are challenges after post-graduation period but we can overcome those.”
The local ready-made garment (RMG) industry has proved that the sector can grow and sustain without basic raw materials and tariff benefit especially from the US.
RMG contributes only 7% to the gross domestic product and manufacturing sectors 35 per cent, said Mr Kaikaus, adding that the country’s strength is its domestic market.
ERD secretary Sharifa Khan said Bangladesh will enjoy existing duty benefit of the EU until 2029 and all LDCs requested the World Trade Organization to extend LDC facilities for another six years.
“We can sustain but the global community should align their GSP programmes in line with the SDGs,” she noted.
Ms Khan urged global apparel buyers and development partners to show generosity and not to put conditions one after another.
Bangladesh Ambassador to the Netherlands Riaz Hamidullah said industry should have four new principles-dignity rights, shared prosperity rights, transparency and responsibility rights, and harmonious industrial relations.
These are the key to becoming a middle-income country, he said, adding that the EU green deal, circular economy and net zero world are going to transform the industry.
Mr Hamidullah stressed the importance of technology, innovation and design to face the challenges.
BGMEA director Asif Ibrahim said LDC graduation has challenges as the country loses duty benefit in major markets, especially in the EU.
It enjoys duty-free access to 38 countries under GSP, including the UK and 27 EU countries, he stated.
Overall capability of the economy has to be improved, economic diversification, technological upgradation, skills development and institutional strengthening should be prioritised, he observed.