Duty-free access to Canada in limbo

Uncertainty looms over the duty-free access of Bangladeshi readymade garment to Canadian market, as India and China, where the country import fabrics and yarns from, has been dropped from the developed nation’s GPT, or General Preferential Tariff, facility.

“Since India and China have been dropped from the GPT facility this year, Bangladesh may face some problems,” Commerce Secretary Mahbub Ahmed said on Monday.

As per rules, the apparel manufactured with the raw materials from any country not included in the GPT facility cannot enjoy the advantage.

The Secretary, however, said the government began efforts for Bangladeshi products to continue enjoying the facility.

After a meeting at the Secretariat with the people concerned, the Secretary told reporters: “We’ll send letters to the Canadian government seeking some facility to continue the duty-free access for Bangladeshi goods.”

The developed nation gives duty-free or preferential status under GPT to 175 developing countries, including Bangladesh.

It reviewed the GPT facility this year when 72 countries, including China and India, were barred from the facility.

Ahmed said though Bangladesh was not among those 72 countries, it still might face problems as the two major sources of its raw materials have been excluded.

According to government statistics, of the total demand in Bangladesh’s garment sector, around 60 percent of woven fabrics and 50 percent of yarns are imported from India and China.

President of Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA) Shafiul Islam Mohiuddin told bdnews24.com that the country was not in a position to stop importing raw materials from the two countries.

He feared that exports of Bangladeshi goods to Canada could decline by 40 to 50 percent if the duty-free access was not continued.

Last year, Bangladesh exported goods worth Tk 1 billion to the Canadian market, of which $912 million came from the readymade garment products.

Woven garment accounted for around 55 percent and knitwear 45 percent of the earnings.

Commerce Secretary Ahmed said: “There’s no major problem with knitwear exports. The problem is with the woven garment exports. We’ll seek some advantages from the Canadian government to overcome the problem.”