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BGMEA to start lobbying with major trading partners

Move to extend GSP transition period to six more years

19 March 2023

Staff Reporter :
The entrepreneurs of the country's apparel industry will start lobbying with major trading partners and bloc from the next month to get extension of the least-developed country (LDC) benefits for six more years after Bangladesh's graduation to a developing nation.
"As part of the negotiation we will meet the director general of the trade of the European Union (EU) next month, senior officials of Germany and many other
 major trading partners of Bangladesh so they agree for extension of the LDC trade benefit for at least for six years more," said Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He was speaking at a press conference at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) complex in the city on Saturday. The apex body of the apparel sector thinks that they would face tough competition in the global markets when the country will lose the duty-free trade benefit that is generalised system of preferences (GSP) after its graduation from LDC category in 2026.
They have long been demanding the extension of the LDC trade benefit, but the lobbying was not strong enough as they thought they could cover the competition if the graduation takes place.
Claiming the achievement of desired apparel export growth would be difficult in days to come through the existing model, Faruque said, "We have to be given priorities on some issues. Special initiatives should be taken to increase competitiveness in coming days and to increase investment in backward linkage industries and non-cotton items."
Some 52 per cent goods of global apparel trades is non-cotton item, whereas only 26 per cent of our total RMG export is non-cotton. So, we have a lot of chances to improve here, he added.
For this, government policy supports including incentives on export of non-cotton items, simplification of customs and bonded warehouse rules should be increased, the BGMEA president said.
He further said, "Circular fashion turned an important agenda into sustainable fashion as global consumers' behavior has been changed and they are showing very much interest in circular fashion and recycled goods. Considering it, we are giving importance on use of post-industrial wastage as raw materials."
"The textile and apparel sectors produced around 5 lakh tonnes wastages each year and the country earned $400 million yearly by exporting a portion of it. But, we will be able to produce goods worth $5 billion, if we able to recycle the wastages," the BGMEA president said.
He said, "Keeping it in mind, we are discussing with the government to keep all procedures, goods and services related to the recycle industry out of duty and VAT to encourage people to invest here."
Mentioning they have taken the Intellectual Property Right (IPR) protection and enforcement issued by USTR seriously, he said, "BGMEA has already taken several steps in this regard. Apart from this, we discussed with the American Apparel and Footwear Association (AAFA) to inform the US government about the use digital level through QR code instead of conventional one."
"The digital leveling will ensure transparency and traceability of our goods as well as play vital role to control counterfeit in our production, reduce manufacturing cost and will help to bring down carbon footprint in apparel making," he added.
He also said that the outbreak of the Russia-Ukraine war and the severe fallouts of the Covid-19 have been affecting the trade as the consumers in the world reduced the consumption of apparel items with the rise in inflation and fall in incomes.
"Actually, the export earnings, we have seen, are value-based and not volume-based. In fact, the apparel export earnings have reduced this year compared to previous year. Even, the value-based export earnings will also come down further next month," he said.

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