Country’s garment industry is set to receive a boost as Canada extends duty-free access for the export of ready-made garments for an additional 10 years.
The move comes as the Canadian Parliament approved a new finance bill, exempting Bangladesh from paying duties on its garment exports until 2034. This development was communicated by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) through a press release.
Under the General Preferential Tariff (GPT) scheme, Canada provides duty-free benefits to developing countries, and this extension holds significant importance for Bangladesh's export-driven economy.
Bangladesh has been benefiting from quota-free and duty-free access to the Canadian market since 2003 under the GPT scheme. This scheme is renewed every decade, and the current one was set to expire in 2024. The extension until 2034 assures a longer period of duty-free export benefits for the country.
Furthermore, Canada has introduced the ‘GPT Plus’ scheme, which offers duty-free benefits to developing countries that demonstrate adherence to international labor rights and environmental standards. This initiative is in line with Canada's Free Trade Agreement (FTA) benefits.
While Bangladesh will officially be recognized as a developing country in 2026, it will continue to enjoy duty-free benefits in the Canadian market until 2034. This extension is expected to play a pivotal role in the growth of the country’s garment exports, given Canada's position as one of its major markets.
BGMEA President Faruque Hassan expressed his satisfaction with the decision, noting that the extension alleviates concerns about losing duty-free benefits during Bangladesh's transition from a least developed country. He highlighted BGMEA's efforts to promote environmentally friendly practices and positive industry image as contributing factors to this positive outcome.
Canada ranks as one of Bangladesh’s prominent garment importers, with exports worth $1.55 billion in the fiscal year 2022-23, marking a growth of 16.55 percent from the previous year. This extension opens doors for Bangladesh to further enhance its market share in Canada and expand its export potential. The increased certainty in trade relations also aligns with Bangladesh's aim to transition out of the list of least developed countries by 2026.
BGMEA President Faruque Hassan urged international buyers to consider raising garment prices to ensure a sustainable industry ecosystem. He also emphasized the need for healthy competition among domestic entrepreneurs, discouraging a race to the bottom in terms of pricing. This extension of duty-free access signifies a significant milestone for Bangladesh's garment industry, cementing its position as a crucial player in the global apparel market.