The New Nation - Internet Edition

Staff Reporter

Commerce Minister Lt Col (Retd) Faruk Khan yesterday urged the trading partners of the country to consider the trade issue from the development point of view instead of mixing up with politics.

"Do not take trade as a political weapon but a tool for development," the Minister said while addressing a seminar on 'Bangladesh Trade: Latest Developments and Challenges' organised by EU Dhaka office.

He sought assistance of the developed nations especially of the European Union, in tackling the existing problems of Bangladesh and also to accelerate its growth pace.

Economists, exporters and representatives from different trade bodies and the related ministries and government organisations participated in the seminar when they shared their experiences and suggestions on the issue.

The Minister said that Bangladesh would face new challenges in the European market as the 27-member strong alliance of the European nations is going to offer enhanced marketing facilities to Bangladesh's competitors in the trade field.

The EU is signing Free Trade Agreement (FTA) with India, South Korea and ASEAN nations, offering them easy excess to European market and also making easier the rules of origin for Generalised System of Preference (GSP), which will provide Bangladesh's competitors more edge in the global market.

Bangladesh now enjoys extra competitive edge in the EU market with the GSP facility under which the exporters get zero tariff entry to the EU when India, China and some other countries have to pay certain amount of tariff.

But the competitive edge will erode after EUs signing FTA with India and other nations and easing of the Rules of Origin, offering them greater market access with lower tariff or no tariff at all.

"As in the forefront of the Least Developed Countries (LPCs), Bangladesh expects the EU to stand by its side," Faruk Khan said referring to the years old relations between Bangladesh and European countries.

The minister said the proposed Rules of Origin and the FTA would reduce Bangladesh export competitiveness in the EU market, but export diversification, quality development and capacity building would help keep the market in favour of Bangladesh.

"Our export basket is still narrow and highly depended on the apparel sector," the minister said and suggested for adding more items to the list of exportables.

Mentioning that the problem of nitrofuran contamination in the shrimp exports to the EU is one of the major impediments to trade expansion in fisheries sector, he expressed his confidence that a joint effort by the government with the private-sector stakeholders would help solve any problem facing the exporters.

He said the growth of export to the EU over the years is due to EBA (Everything but Arms) introduced by the EU in 2001 as an amendment to the GSP, which provides duty and quota-free access of all products from 50 LDCs, including Bangladesh, to EU countries.

But, stringent Rules of Origin along with some technical barriers such as sanitary and phytosanitary obligations are holding back further growth.

Faruk Khan noted that Bangladesh has maintained its market share and increased exports of RMG even after the abolition of quota, which demonstrated the competitiveness and quality of the products of Bangladesh.

Dr. Stefan Frowein, head of delegation of the European Commission, said Europe is Bangladesh's number one trade partner and the European Union has for many years provided Bangladesh with "the best possible market access".

He informed that Bangladesh's share of the EUs clothing imports is close to 8 per cent, placing the country ahead of all other countries, including India, but except China and Turkey.

He informed that Bangladesh exported 5.4 billion euros worth of goods to the European Union while Bangladesh imported some 1 billion euros of goods from the EU countries in 2008.

Discussants at the seminar pointed out an enormous potential of furniture and agro-based sectors on the EU market. The potentialities in the pharmaceutical, shipbuilding, leather products/footwear, light engineering, plastic products and new items for textiles were also focused.

Two trade advisers of EU, Jennie Lundmark and Zillul Hye Razi, presented two papers, describing the present state of EU-Bangladesh trade relations and focusing on the areas where the EU is now working with the government to explore more trade and business opportunities.

Mostafa Mohiuddin, additional secretary of the Commerce Ministry, and Export Promotion Bureau (EPB) director M Abdur Rahman also spoke, among others, at the seminar.