Bangladesh needs to improve issues like labour rights to get GSP plus facility

EU delegation suggests at EU-Bangladesh Business Climate Dialogue

Staff Correspondent | Published: 00:00, Dec 09,2019


Commerce minister Tipu Munshi speaks while inaugurating the Sixth EU-Bangladesh Business Climate Dialogue held at the ministry in Dhaka on Sunday. European Union delegation head Rensje Teerink was also present, among others. — PID photo

The European Union delegation on Bangladesh on Sunday said that Bangladesh would not get generalised system of preferences (GSP) plus in the EU market automatically, rather the country would have to address many of the outstanding issues including labour rights.

‘GSP plus will not come automatically, it will come at a cost and the government of Bangladesh will have to comply with some conditions in 12-18 months,’ German ambassador Peter Fahrenholtz told New Age after the EU-Bangladesh Business Climate Dialogue held at the commerce ministry in the capital.

He said that they talked about the conditions for GSP plus and the government would have to fulfil the conditions in time.

‘Bangladesh has made progress but, of course, more have to be done and these need to begin now,’ Fahrenholtz said.

He said it was a very urgent task for the government of Bangladesh to quickly improve the business climate.

‘Bangladesh has achieved tremendous progress and high growth rate but this growth rate will not sustain without massive amount of foreign direct investment as the country is moving towards a middle-income country,’ the German ambassador said.

He urged the government for the quick improvement of trade relation, taxation issues of foreign companies and overall regulation and registration process of FDI.

‘Before looking forward to GSP plus, we are now in the process of revisiting how the instrument of GSP plus will be taking shape in the context of new multilateral framework…and Bangladesh has to make sure many of the outstanding labour issues are addressed,’ EU delegation head Rensje Teerink said at a briefing after the dialogue.

Bangladesh has made tremendous progress in labour right issues but it does not mean that there are no outstanding issues, she said.

Teerink said that they were working with the labour and commerce ministries on some outstanding labour issues including right to freedom of association for the workers in export processing zones.

She said that Bangladesh was getting benefits from GSP facility under everything but arms scheme and the country saved some 2 billion euro in tariff in the year of 2018.

‘In the dialogue, we have discussed the goal of Bangladesh that is graduating from LDC state by 2024 and its very ambitious development agenda and of course FDI plays a key role here,’ Teerink said.

The head of EU mission suggested that whilst there was no shortage of law or policies in Bangladesh to regulate trade and investment, the main difficulty was due to the lack of their effective enforcement.

Among other issues, the ambassadors stressed the need for full and proper implementation of bilateral double taxation avoidance agreements, removing investment cap in the services sector, and upgrading the delivery of services at Chattogram port and Dhaka airport.

They suggested having a predictable and transparent taxation and VAT regime as well as an improvement in Bangladesh’s judicial system to ensure immediate and effective enforcement of contracts on which Bangladesh ranks next to last globally, as reported by the World Bank’s Doing-Business Index 2020.

Commerce minister Tipu Munshi in his introductory remarks urged the EU mission to provide GSP plus facility for Bangladesh as the existing trade privilege in the zone would be withdrawn in 2017 after graduation of the country from least developed one.

He assured the EU that the human rights, labour compliance and good governance standards were being improved gradually in the country.

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