Bangladesh needs to develop a long-term strategy and action plan, ink trade deal to maintain existing export market access and attract investment mainly to face the post-graduation challenges including erosion of duty benefit, reports BSS.
Bangladeshi made garment will face about 11.6 per cent duty after 2029 which is now zero per cent.
Bangladesh has been the single largest beneficiary of EU LDC-specific trade preferences as its exports rose to US$23.2 billion in last fiscal which was only US$2.0 billion in 2000-01.
The country is also taking the advantage of China's market share most in the EU market mainly because of the duty benefit while Vietnam gains most from China shift to US market.
The suggestions and statistics were made today at a seminar on '50 years of EU-Bangladesh Partnership: Charting Ahead on a Legacy of Success' held at a city hotel.
Research and Policy Integration for Development (RAPID) and Fredrich-Ebert-Stiftung (FES) Bangladesh organised the seminar.
Prime minister's economic affairs advisor Mashiur Rahman was the chief guest while EU ambassador to Bangladesh Charles Whiteley was special guest at the seminar moderated by Dhaka University professor and executive director of RAPID M Abu Eusuf.
UNDP Bangladesh country economist Nazneen Ahmed moderated a panel discussion while resident representative of FES Bangladesh Felix Kolbitz, among others, also spoke.
Presenting the keynote paper, RAPID chairman MA Razzaque showed how EU's LDC tariff preference helped Bangladesh raising its clothing export market share there, making the country world's second largest clothing exporter.
Taking advantage of tariff preference, Bangladesh captures more than 22 per cent of extra-EU apparel imports, he noted.
Bangladesh still has huge export potential in the EU as only 60 per cent of export potential is currently being utilised.
Bangladesh's graduation in 2026 would result in immediate cessation of LDC-related trade preferences in most countries including Canada, China, India, and Japan, he said, adding that only the EU and the UK would provide an additional three-year transition period until 2029.
In comparison, while Bangladesh stands to lose trade preferences, free trade agreements could allow its competitors to gain competitive advantages in the EU.
Citing example, he said Vietnam will enjoy zero duty to the EU by this time due to its FTA with EU.
He recommended for developing a national-level consensus on the options about emerging issues like EU Green Deal and its carbon border adjustment mechanism (CBAM) and any policy shifts in the EU.
Mashiur Rahman called for improving labour force quality, export product diversification, investment in service sectors including health and education.
Mashiur also preferred not to allow bringing such money in the country, saying it distorts market.
Professor of International Relations at Dhaka University Imtiaz Ahmed said money from Bangladesh is laundered to EU which is 'serious problem'.
He noted that money laundering itself a corruption but corruption itself is not the problem. If the corruption money is getting reinvested in Bangladesh it could have been productive but it was getting reinvested in Europe.
Regarding the Bangladeshi Diaspora there, he said the community are different from that of Vietnam saying local Diaspora are not engaged in business or investment here in the country and sought EU's support so that they make investment in not only in industries but also in other areas like education and entertainment.
Whiteley said EU has a wide ranging relationship with Bangladesh in last 50 years and it is now changing towards development of humanitarian assistance and trade.
EU businesses want to come here but still there is sometimes untoward obstacles to investing or bring them able to a win-win situation, he added.
EU has US$2.0 billion investment stock here in Bangladesh while US$6.0 billion in Vietnam.
"I think this can change and change quickly if policy makes right in Bangladesh side," he said, terming Bangladesh a great place to do business.
He, however, stressed for improving the situation further.
Explaining the measures they are taking to overcome the challenges, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan urged the EU to extend the transition period by six-year for Bangladesh after its graduation from least developed country in 2026.
Taking the geo-political situation, Russia-Ukraine war, Rohinga crisis and the Covid-19 pandemic into consideration, the EU should allow its duty free market access for Bangladesh up to 2032, he said.