The New Nation - Internet Edition

Staff Reporter

The new draft rules of the Generalised, System of Preferences (GSP) of the European Union may hard hit country knitwear sector and its backward linkage industries, fears sector leaders.

"Bangladesh's knitwear sector grew depending on the trade friendly policy of government and cooperation of European Commission to the least developed countries. But the new draft rules will hit hard the sector," BKMEA president Fazlul Huq told at a press conference at his office. Opposing the new draft of the EU GSP the BKMEA president said the new rule entitles 30 per cent value addition to get GSP facilities, which will be disastrous. "It will allow imported fabrics also to get GSP facilities."

Huq said approval of the new GSP rule will discourage people to invest in backward linkage industries which helped grow Bangladesh's knitwear sector. The new rule may harvest something for the time being but after four to five years time Bangladesh will loss its market to China, India, Pakistan and Turkey. "Once the new rule is approved China will be the main beneficiary through setting up mills in Cambodia using its low price fabrics," he said.

Requesting the EU to revise the draft he demanded to fix the value addition to 45 per cent to be eligible for GSP facilities.

Fazlu also informed that unusual price hike of yarn in the local market has put the knitwear sector at dire state.