Bangladesh has sought the Generalised Scheme of Preferences (GSP) Plus trade facilities from the European Union, after its graduation to the status of a developing country.
Commerce Minister Tipu Munshi requested for the GSP Plus trade facilities at the 6th plenary of EU-Bangladesh Business Climate Dialogue at the Commerce ministry on Sunday.
Bangladesh, as a Least Developed Country (LDC), currently enjoys the duty-free access to the EU market under the Everything But Arms (EBA) initiative.
GSP Plus is a special incentive arrangement for sustainable development and good governance and it grants full removal of tariffs on over 66 percent of EU tariff lines.
"Although our export of ready-made garment is higher than the existing threshold of granting GSP Plus, the EU should consider giving us the GSP Plus facilities on the humanitarian ground including alleviating poverty, generating employment, and empowering women," said the commerce minister.
"EU is very important to Bangladesh as it has been helping us improve our socio-economic development since independence. About 58 percent of our export is made to EU countries, generating about $22billion foreign exchange in 2018-19. This enabled us to achieve the threshold requirement for LDC graduation," he said.
Tipu also hoped that the EU would help Bangladesh find an appropriate mechanism to improve its business climate.
The EU is Bangladesh's number one trading partner and the second-largest source of FDI to Bangladesh.
It has been also decided at the meeting that Bangladesh government will work fast to implement the duty-free import of non-commercial goods, including samples and other small consignments, up to Tk2,000 and determine the customs value of imported goods based on the actual value, for all countries.
Commerce Minister Tipu Munshi chaired the dialogue while it was co-chaired by Secretary Commerce Dr Md Jafar Uddin and European Union (EU) Ambassador to Bangladesh Rensje Teerink.
The Bangladesh and EU delegations discussed 16 issues at the dialogue.
Eight EU Heads of Diplomatic Missions in Dhaka – Denmark, France, Germany, Italy, Netherlands, Spain, Sweden, and the UK also attended the dialogue.
Government authorities including the Bangladesh Investment Development Authority, the National Board of Revenue (NBR) and Bangladesh Bank and representatives from the EU private sector participated in the dialogue.
Tapan Kanti Ghosh, a secretary-level official of Commerce ministry, told the media after the meeting that the NBR issued Customs (De minimis) Rules 2019, on September 19, which allows duty-free import of non-commercial goods up to Tk2,000. But it only remained on paper.
"From today all the local and foreign importers will enjoy the benefit. Following the request of the EU delegations, we have already asked the customs officials to follow the rules," Tapan said.
De minimis means either a value of the imported goods on which customs authorities do not collect duties and taxes or a total amount of duties and taxes on imported products the customs authorities offer the exemption.
The NBR in July 2018 raised the exemption value to Tk2,000 in the Customs Act 1969 from previous Tk1,000 following the stakeholders' request, including that of EU delegation to Bangladesh. But it did not become effective in the absence of relevant rules.
Bangladeshi exports to the EU amounted to about €18 billion in 2018, while the EU exports to Bangladesh were to the tune of €3.5 billion, according to the EU Embassy in Dhaka.
"Bangladesh must be more serious to create a good business climate and remove all barriers," the EU Ambassador said.
Different tariffs and para-tariff barriers, now, obstruct quality European products from entering into Bangladesh, she said, adding that the Bangladesh side was cordial to resolve the problem of EU investors.
Bangladesh has been enjoying the EU's EBA facilities but the EU investors are facing difficulties to do businesses here. To resolve the problem, Bangladesh and the EU took the initiative to arrange EU-Bangladesh Business Climate dialogue on May 22 in 2016.
Five working groups on customs, pharmaceuticals, tax, financial flows and investment were formed following the 2016 dialogue's recommendations.
The next plenary is scheduled for July 2020.