50 Star US Inc.
Bangladesh is losing more than 40% of its export potential to the European market, according to a research by Research and Policy Integration for Development (RAPID), because it lacks diversified products and standardized certification. According to the report, Bangladesh used $23 billion of its potential $40 billion in exports to the EU in 2021.
Of the $17 billion that was left unused, $2.5 billion was spent on non-apparel items. This indicates that there is a lot of untapped potential for our RMG commerce in the EU.
Bangladeshi products have long found a significant market in the European Union (EU). 27 EU nations receive 48% of all Bangladeshi exports of goods. Exports are roughly $25 billion every year. In contrast, less than $4 billion (5% of total imports) is spent on imports from the EU. Bangladesh now enjoys a significant advantage in its bilateral commerce with the EU.
Data from the Export Development Bureau show that Bangladesh exported $25.52 billion worth of goods to the EU during the most recent fiscal year 2022–2023. Ready-made clothing makes up 93 percent of all Bangladeshi exports to the EU. More than half of all garment exports, or $23.53 billion, were made in the country during the most recent fiscal year.
A total of $103.9 billion worth of ready-made clothing was imported by EU nations in 2022 from various nations. With a market share of 30.2% and apparel exports of $31.40 billion, China was the leader among them. With a 22% market share, Bangladesh is the second-largest exporter of ready-made clothing in this market, with $22.89 billion in exports. Due to shifting overseas customer demand and the current geopolitical climate, China's garment output is falling. Bangladesh has a chance to take advantage of these shifting orders.
Surprisingly, even while we behind China in terms of export volume, we lead the EU in terms of export revenue. Bangladesh continues to offer clothing at the second-lowest price among the top 10 exporting nations in the European Union (EU). In order to enhance its existing 11% market share for goods made of man-made fibers, Bangladesh should concentrate on exporting value-added goods.
However, during the past 20 years, the clothing sector has solidified its position in this market through the use of GSP, or preferential market facilities. Bangladesh will be moved from the list of least developed countries (LDCs) to the developing list in 2026, but the facility will still be in place for the next three years, or until 2029. For Bangladesh to continue receiving duty-free benefits in the EU after that, it must first be eligible for GSP Plus. In this situation, Bangladesh will have the most difficulty competing on the EU market. The Bangladeshi government is negotiating this with the EU.
In this setting, the European Union Parliament passed a resolution voicing concern over Bangladesh's human rights situation. It questioned the Generalized System of Preferences (GSP) at the European Union's "Everything But Arms" (EBA) facility in Bangladesh. The EBA program offers access to the GSP facility.
If the EU Parliament approves the GSP Plus draft, clothes made in Bangladesh will remain subject to the first eligibility requirement. The clothing must then be shipped to the EU with a charge of roughly 12%. But in the cutthroat market of today, a 1-2 percent price variation causes us to lose orders.
'Sustainable development' and 'good governance' circumstances are more complicated than only the challenging technological problems. 'Sustainable Requirements' refers to all of these requirements. Therefore, we must get ready right away to handle the approaching circumstances and any difficulties. The relevant data must be gathered and analyzed by governments and all trade groups. How to properly argue for the indicators of "Economic Fragility" and "Import Share" in order to receive GSP Plus advantages.
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