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EU moves to withdraw EBA for Cambodia

Window of opportunity for Bangladesh likely

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Kazi Zahidul Hasan :
The European Union's withdrawal of 'Everything But Arms (EBA)' trade arrangement with Cambodia will bring a window of opportunity for boosting Bangladesh's export to the 28-nations economic block, trade officials and exporters said.
They argued if Cambodia loses the trade benefit, it will hurt competitiveness of the country's export to the EU, paving the way of increasing Bangladesh's export there.  
The EU grants EBA to the 48 Least Developed Countries (LDCs), including Bangladesh and Cambodia, under which they're enjoying duty free and quota free market access to the EU for exports of all products, except arms and ammunition.
The EU notified Cambodia on October 5 that the Kingdom would lose its duty-free access to the EU market unless it makes "clear and demonstrable improvements" to human rights and democracy in the country.
European Union ambassador to Cambodia George Edgar told The Phnom Penh Post that withdrawal of the EBA scheme would need an 18-month timeframe.
"The decision to suspend Cambodia's EBA scheme would initially take a 12-month process. But another six-month grace period would be given, bringing the total timeframe   to possibly withdraw the EBA scheme to 18 months," he added.  "Definitely, it will bring a big opportunity for Bangladesh as Cambodian export to EU will become uncompetitive following suspension of the GSP facility," a senior trade official told The New Nation on Friday, preferring anonymity.
He said a suspension of the trade privilege meaning the Cambodian exports to EU will face a higher tariff up to 12 per cent whereas Bangladesh's export will remain duty-free, further promoting the latter's export to EU.
Exports to EU by far Bangladesh's largest market where it shipped goods worth US$ 21.33 billion in the fiscal year 2017-18, accounting for 58 per cent share of its total shipments, according to the Export Promotion Bureau.
However, EU's annual import from Cambodia is about US$ 6.0 billion.
"The high import duty will make EU businesses uncompetitive in Cambodia which can immensely influence its import from the country. A major portion of this import may be shifted to Bangladesh due to competitiveness of local merchandises," said the trade official.
The official further said that the Commerce Ministry is following the development so that appropriate policy can be developed immediately after the EU's sanctions on Cambodia.    Earlier, the EU also warned Bangladesh of suspending the EBA trade arrangement unless the country makes progress in the implementation of workers' rights.
"Cambodia is a major competitor of Bangladesh in global apparel trade. If EU suspends or withdraws the EBA to Cambodia it can bring an opportunity for Bangladesh. But we're not ready to take the opportunity at the cost of 'misfortune' of another LDC," M Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) told The New Nation on Friday.
"We don't want unjust opportunity. We want fair and impartial trade benefit from the developed nations based on industry strength, comparative advantage and development in labour rights and workplace safety," he added.
Mohiuddin, one of the country's leading garment exporters, also said that local garment industry, the mainstay of Bangladesh economy, has gone under tremendous transformation in terms of compliance and labour rights following the Rana Plaza building collapse.
"Most of the factories have become compliant by this time and process is on to make others compliant. We can't do it overnight … It will take time, " he added.

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