According to a study by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh's garment exporters can minimize their losses from the ending of duty-free trade benefits by European Union (EU) to $3.2 billion, if they avail the generalized system of preferences (GSP) benefits
The EU offers standard GSP for low and lower-middle-income countries. This means a partial or full removal of customs duties on two-third of tariff lines.
Bangladesh currently enjoys duty-free, quota-free access for all products except arms and ammunition in the EU market as a least developed country (LDC) under the EBA (Everything But Arms) facility.
On termination of these benefits, Bangladesh's shipment to the EU will face the worst impact after graduation as the bloc accounts for 61 per cent of the duty-free export from the country.
Applying the standard GSP or most-favoured-nation (MFN) tariff will escalate the cost of sourcing from Bangladesh further. The EU's global average import price dropped 4.35 per cent from 2013 to 2018.
