Apparel makers see huge market in Russia after its inclusion in WTO

Apparel makers see huge market in Russia after its inclusion in WTO

Hosain Ahmad

Apparel makers of the country see a good prospect of boosting their exports to Russia as it is set to join the World Trade Organisation in December.

They said once Russia joined the WTO, Bangladesh, as a least developed country and a member of the WTO, could step up its negotiations with the country for duty-free access for Bangladesh’s apparel items.

Bangladesh, as an LDC, enjoys duty- and quota-free access of jute, tea, frozen foods, and pharmaceutical products under the framework of Council of Euro-Asian Economic Community to its member countries including to Russia, Belarus and Kazakhstan.

But, the country is yet to get duty- and quota-free access of its major export item, readymade garment, to Russia, resulting in high cost of exporting RMG products from Bangladesh to Russian market, which is dominated by Chinese and Turkish products.

The country has a prospect of exporting knitwear products worth $2,500 million a year to Russia, said Bangladesh Knitwear Manufacturers’ and Exporters’ Association second vice president Hatem Ali.

Hatem said, ‘Russia’s inclusion in the WTO would create a favourable situation for our initiative to negotiate for duty-free access of Bangladeshi products to the Russian market.’

The BKMEA vice president said Bangladeshi apparel exporters had to pay 20 per cent import duty and an extra charge of one Euro for every three and a half kilogram of products with value-added tax for exporting apparels to Russia.

‘Sometimes, even the cost of exporting a certain amount of products becomes same as its production cost. For instance, if any one wants to export knitwear items having a production cost of $1 million, he has to pay another $1 million in duty and other charges,’ Hatem said.

The process of Russia’s inclusion in the WTO cleared a major hurdle on November 10 when the WTO Working Party on Russia’s inclusion spelled out the terms of Russia’s entry to the organisation. The WTO Working Party’s recommendation will be sent to the ministerial conference in Geneva on December 15-17 and the conference is expected to approve it and accept Russia as a WTO member.

Bangladesh Garments Manufacturers’ and Exporters’ Association president Shafiul Islam Mohiuddin said Bangladeshi apparel exporters could access the huge Russian market directly after Russia became a WTO member, given that the tariff rate was reduced.

Shafiul said the banking channel between Russia and Bangladesh was yet to develop a lot to facilitate bilateral trade, although it had developed to some extent in recent times.

The BGMEA president said woven garment manufacturers could export products worth around $3 billion to the Russian market.

He emphasised government initiative to get duty-free access to the Russian market through the WTO and build a good bilateral relation for developing the banking channel with Russia.

Noor Sewing and Dyeing Ltd managing director Monsoor Ahmed told New Age that the business leaders of Russian Federation were interested to do business with their Bangladeshi counterparts.

Commerce ministry WTO Cell director general Amitava Chakravarty said Bangladesh would get the advantages from the Russian market like all LDCs received from the developed countries under the general rules of WTO.

In the last fiscal year, Bangladesh exported to Russian Federation products worth $97 million including knitwear products worth $42 million, jute and jute goods worth $18 million, woven products worth $9 million, and frozen fish worth $9 million.


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