The government should start a fresh move towards striking a bilateral free trade agreement (FTA) with the United Kingdom to keep intact its competitive advantage alongside duty-free trade facilities in the country's market, say experts and entrepreneurs.
Bangladesh is now enjoying such privileges in the European Union market under the Everything But Arms (EBA) arrangement.
If the country takes too much time in doing so, its export earnings might get affected in the UK, businessmen say.
However, commerce ministry officials said they do not see any problem until 2027 as the UK will make the EBA arrangement available until that time for the least developed countries (LDCs) even after graduation.
Bangladesh is currently enjoying duty-free access to the British market as prescribed by the EU's EBA scheme for LDCs.
The country is set to move out of the LDC status in 2024. The EU is expected to offer duty-free access for three more years to 2027.
The British government is working on the terms to safeguard its economy and businesses from possible negative impacts. In this regard, the UK government is also signing a number of trade deals with various countries.
The UK and the EU signed trade and security agreements on Thursday. Finally, the deal will be implemented from next year and it should be rectified by both parliaments.
Ali Ahmed, chief executive officer of Bangladesh Foreign Trade Institute, said Bangladesh needs to sign a separate deal with the UK for doing business with it from next year as the country is now out of the EU.
"We need to re-negotiate with the UK to sign a separate trade deal and should start it immediately as they are going to reduce duty for everyone," he added.
Mohammed Hatem, a knitwear exporter, said, "We should initiate a process to sign an FTA with the UK. If we take too much time, there might appear some complexities."
It is high time to take such a move as the UK is now signing such a trade deal with many countries, he added.
"Till now, we are also a less efficient country in terms of apparel production among the top garment exporting countries, even though we have taken many initiatives to boost efficiency in the last few years," said Hatem, also the first vice-president of Bangladesh Knitwear Manufacturers and Exporters Association.
Officials at the commerce ministry's FTA wing said they have no plan to immediately initiate any deal as Bangladesh will enjoy the duty-free market facility in the UK as in the EU for three years after the LDC graduation. The UK government has already confirmed it.
Commerce ministry officials also said as per the United Nations rules, a graduated country can enjoy such facilities for 3 to 5 years, Bangladesh will try to get the maximum.
As an LDC coordinator, the Republic of Chad, a north-central African country, has applied to the World Trade Organisation to continue the same facilities at least for the next 12 years after the graduation of any LDC. The agenda will be placed before the World Trade Organisation's (WTO) next ministerial meeting.
That is why Bangladesh has no plan to sign a Preferential Trade Agreement or an FTA immediately.
The British government has planned to restructure their tariff rate for apparel items that might be reduced by at least 5-7% from the existing 12-18%.
Other duties might come down to 10% from 20%, besides a minimum duty on some items may be abolished.
According to the global media reports, The UK has already signed an FTA with Singapore this month. A number of countries in this process. That might put pressure on Bangladeshi apparel exporters as they do not have higher productivity or efficiency than their competitor countries.
Commerce ministry officials mentioned that Bangladeshi entrepreneurs should focus on increasing their efficiency.
In the new era of the UK, some EU apparel exporting countries will get priority to exporting to the UK as they have a near-shore advantage, commerce ministry officials said, adding that Bangladeshi apparel makers have no alternative to improving their productivity and efficiency.