Economic researchers and policy-makers have highlighted the criticality of continuing negotiations with the European Union (EU) so that Bangladeshi products can continue to enjoy their current exclusive access to that market until 2030 – even after graduating from Least Developed Country (LDC) status in 2024.
At the event – jointly hosted on Sunday by Research and Policy integration for Development (RAPID), and the Asia Foundation and Economic Reporters' Forum (ERF) – they pointed out that smooth graduation could be integrated with the Sustainable Development Goals (SDGs) to be realised by 2030.
Bangladeshi products would continue to enjoy duty-free access to the EU market three years after graduation in 2024, after which 9.5% duty would be imposed on Bangladeshi items, RAPID Chairman Abdur Razzaque told a webinar titled "Getting Ready for LDC Graduation".
He said the situation prompted by the graduation would not be difficult to overcome provided the export outlook remained bright.
"Around 65% of Bangladeshi exports head to the EU and UK markets. If the EU market supports a smooth graduation until 2027, including the transitional period, we will enjoy the facilities in the UK market as well," he argued.
Razzaque, however, suggested that the government negotiate with other countries to enjoy such EU-like benefits during the transitional period.
Speaking on the occasion as the chief guest, Planning Minister MA Mannan suggested that the Ministry of Commerce boost communication with EU and the UK to extract maximum benefits after LDC graduation.
In response to a question, Mannan said he does not want the country to move ahead for long with the LDC tag. "I am very much in favour of shedding the LDC status. Although there are always fears of slipping, there are also thousands of opportunities out there. We must keep in mind that keeping pace with the world is our ultimate goal," commented the minister.
In the meantime, Commerce Secretary Md Jafar Uddin remarked that the country does not have too much to be worried about with regards to losing trade after graduation. "Negotiations are on to sign Preferential Trade Agreement (PTA) with 11 countries. Of these, an agreement with Nepal is likely to be inked soon," he added.
ERF General Secretary SM Rashidul Islam moderated the webinar, while ERF President Sharmeen Rinvy presided. BIDA Executive Chairman Md Sirazul Islam also spoke on the occasion.
In his presentation, Dr Abdur Razzaque showed that Bangladesh could make 10% cost savings through exchange rate adjustments, by reducing cost of doing business, improving productivity, upgrading technology, gaining efficiency through improved customs procedures, improving its inland transportation system and capping interest rates – all of which will help boost competitiveness.
Noting that the "mad rush" for free trade agreements (FTA) is not a good sign, he said although the country definitely needs to sign more FTAs and PTAs, these should be done taking into consideration actual benefits to the country.
He also recommended continuing efforts to gain Generalized System of Preferences (GSP) plus facility from EU through proactive influence; continuing persuasion for a gradual phasing-out of facilities, as the tariff for Bangladesh could increase up to 9.5 to 10% after the graduation; and seeking extended transition period from China.
He said, "For Bangladesh, the first and foremost policy focus should be on proactively exploring trade preferences beyond graduation, and especially to look for ways to mitigate any likely adverse consequences resulting from the loss of tariff preferences in the largest export market of the EU."