BANGLADESH has been enjoying zero-duty benefit to the European Union under its Everything but Arms scheme since independence, but once it graduates to a middle income country, it will no longer be eligible for the privilege. The generalised system of preferences Plus scheme will be applicable for Bangladesh then, for which the country will have to fulfil some conditions that include good governance, labour rights, human rights and environment protection. On the sixth dialogue on trade relations between EU and Bangladesh, as reported in New Age on Sunday, the delegates while acknowledging the progress made by the government in addressing workplace safety raised serious concerns, particularly about the violation of workers’ rights to freedom of association and organisation in export processing zones. Their concerns are not unfounded considering the kind of police brutality and legal harassment apparel workers have faced during their movement for better minimum wage in January. Many were slapped with false cases and arrested. It is important for the government to take the concerns of the foreign investors seriously given that 60 per cent of our apparel products are exported to EU.
Undoubtedly, the GSP plus trade benefit carries a lot of weight for Bangladesh to sustain its current economic growth rate. According to a study of South Asian Network on Economic Model, without these trade benefits, Bangladesh will have to pay 12.5 per cent duty for exporting goods to the EU as middle income country, where 54 per cent of the shipments from Bangladesh go. In order to earn the benefit, the government has not only to improve the labour rights situation, but also to contain widespread practice of corruption that the foreign investors consider to be a major impediment to an enabling business environment. In the World Bank Doing-Business Index 2020, Bangladesh still ranks quite low and comes next to last in immediate and effective enforcement of business contracts. The irregularities resulting into delay in delivery services at Chottogram and Dhaka airport do not necessarily make Bangladesh an investment friendly place. For the government to realise its ambitious development agenda, as the foreign development investors suggest, it has to urgently address these concerns. National trade economists has also urged the government to explore the possibility of signing free trade agreement with the EU instead of seeking GSP Plus for continuation of trade privilege as the EU can cancel the trade privilege anytime.
To sustain the current economic growth, earning GSP plus privileges is crucial and for that the government has do much more than assuring foreign delegates that they are gradually improving the labour rights and governance issues in the country. The changes and improvement marked by the foreign investors and EU delegates are also the necessary precondition for an enabling environment for investment and business development. The government, therefore, must act immediately, not just to fulfil the conditions set by EU, but to ensure a sustainable, inclusive economic development in the country.
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