Bangladesh can increase its garment exports to the European Union. So says Research And Policy Integration for Development.

The European Union (EU) is a bloc of 27 nations and over the past decades has emerged as an indispensable trade and development partner for Bangladesh and is by far the largest export market as almost half of Bangladesh’s merchandise exports are destined for the EU.

Bangladesh’s combined exports to the EU and the UK have increased rapidly thanks to the Everything But Arms (EBA) initiative, which has been designed to provide preferential duty-free and quota-free market access of goods originating from least developed countries.

Bangladesh’s exports of garments to the European Union (EU) rose by 45 per cent during January 2022 to June 2022. However Bangladesh’s apparel exports to the European Union may have abide by the carbon border adjustment mechanism (CBAM). The EU has moved to impose the carbon tax initially in five sectors -- cement, iron and steel, aluminum, fertilizer and electricity -- from January 2023.

Although Bangladesh’s major export items like apparel, leather and footwear are not included in the CBAM, these are among the 63 sub-sectors that are identified as sectors with a risk of carbon leakage and the EU might include these later on.