Garment entry to EU on the rise
Refayet Ullah Mirdha
The issuance of certificates to gain zero tariff benefits in garment exports to the European countries increased 37.69 percent in January, compared to the same month last year.
Data shows state-owned Export Promotion Bureau (EPB) issued 33,148 such certificates in January against 24,073 in the same month last year under Generalised System of Preferences given by the developed nations to the least developed countries (LDCs).
The boost came due to the rising demands from the EU region under the new regime.
“The issuance of certificates for duty-free benefits increased mainly for relaxation of the Rules of Origin (RoO) by the EU from January 1 this year,” said EPB Vice-Chairman Jalal Ahmed. He said both the value and volume of exports increased remarkably during this period.
Being an LDC, Bangladesh now enjoys either duty-free facility for everything but arms (EBA) or duty-preference for some selected products or duty concession for exports to 32 countries.
The biggest change under the new regime is that single-stage processing (manufactured from fabric) will be allowed in many cases, instead of two-stage processing (manufactured from yarn).
It means most apparel items from the LDCs will get duty-free access, no matter where the raw materials originate in. The standard import duty for readymade garments in the EU is 12 percent.
The GSP is a trade arrangement allowing reduced or zero tariff on imports from developing countries; and the RoO determines whether imported goods really originate in the countries covered by the GSP.
Under the new GSP rules, exporters will get zero-duty facility even if the products are made from imported fabrics. Previously, the exporters used to get this benefit if only local fabrics were used.