Bangladesh is preparing to seek duty-free trade or Generalized System of Preferences (GSP) facilities for garments export when the new administration takes office in the United States.
Ensuring GSP facility in the US market will create new possibilities for export earnings. The transition from LDCs will accelerate the economy of the country facing the coronavirus crisis.
A letter will be sent shortly to the United States Trade Representative (USTR), after US President-elect Joe Biden takes office.
Director general of the World Trade Organization (WTO) cell Hafizur Rahman told media that, "The new US government will be requested to allow duty-free trade or GSP facility for garment exports. It has become urgent to enter this facility in the coronavirus crisis and LDC passage. As a single country, Bangladesh is the largest exporter of garments to the US. However, GSP facility is not being given for various reasons including labour issue."
He said that the Commerce Ministry had drafted a letter mentioning the benefits of GSP and the rationale behind it. It will be officially sent to the USTR as soon as Joe Biden takes over as president.
After the Rana Plaza tragedy in 2012, the US suspended GSP benefits for all Bangladeshi products. The USTR's Action Plan imposes 17 conditions on the development of the garment sector.
However, since 2004, Bangladesh has been excluded from the GSP facility in garment exports. After the Rana Plaza tragedy, Bangladesh also faced an extreme image crisis in the international market.
By the end of last year, Bangladesh was able to meet 17 conditions of the USTR Action Plan. International organizations are no longer complaining about the issue of safe working environment and labour rights. As an LDC country, Bangladesh has the right to get GSP facility for export.
It may be mentioned that Bangladesh has been excluded from this facility without following the provisions of the World Trade Organization. Although Vietnam ranks lower than Bangladesh in terms of labour rights, entrepreneurs there get GSP benefits in garment exports. Similarly, China, India, Pakistan and Middle Eastern countries are exporting goods under GSP facility. Only Bangladesh has to export garments with a large amount of duty.
The country is already facing grave challenges of pandemic in its economy and export. In this situation export trade is being given utmost importance to bring the economy back to normal and move forward fast. Thus, the authorities are emphasizing ensuring duty-free market facilities.
According to many businessmen, only three percent of the country's total exports go to the US under GSP facility. Garments and textiles, the main export sectors are not in the list of GSP. As a result, the only demand to the new government would be to get duty free and quota free benefits of ready-made garment products.
