The EU is Bangladesh's main trading partner, accounting for around 12% of Bangladesh's total trade.
From 2011 to 2015, Bangladeshi exports to the EU increased from €10.8 billion to €17.6 billion
EU goods trade with Bangladesh
EU–Bangladesh trade documents
Bangladesh's main export industry – textiles & clothing (primarily, ready-made garments) – represents about 90% of the country’s total exports to the EU.
Of the rest, products such as frozen food, agri-products, footwear, leather products and bicycles have grown in importance in recent years.
EU exports to Bangladesh are dominated by machinery and transport equipment.
Preferential export treatment
Under the EU's Generalised System of Preferences (GSP), Bangladeshi goods exports are exempt from normal customs duties, as follows:
- Standard reductions
– 3.5% below normal customs duty for sensitive products
– zero duties for non-sensitive products
– 20% reduction in duties for textile products.
(indefinitely) duty-free and quota-free access for all products except arms and ammunition under the Everything but Arms initiative.
- zero duty for up to 7,200 different products, under GSP+ scheme – as long as it meets certain criteria for sustainable development and good governance
Under EU graduation rules, Bangladesh could lose the GSP treatment for any product that becomes competitive on the EU market (and so no longer needs GSP help).
GSP Regulation 732/2008
Guidelines on how to apply the tariffs – Communication COM (2004)461.
Investment by European companies in Bangladesh offers the following advantages:
- creates new jobs and improves the local skills base
- helps improve working conditions, e.g. by introducing policies like corporate social responsibility and responsible business conduct
- brings advanced technologies, products, services and business practices
- raises the level of Bangladeshi production, helping it compete internationally
- diversifies Bangladesh’s economy, reducing its vulnerability to shocks.
To encourage European exports and investment, the EU and the Bangladesh government meet regularly in the form of the EU-Bangladesh Business Climate Dialogue.
EU interests in these meetings are represented through the EU Business Council in Bangladesh, which advocates for EU firms locally.
The Council comprises both diplomatic (EU Delegation and EU countries' individual diplomatic missions) and business representatives, including EU countries' Chambers of Commerce in Bangladesh.
- May 2016 Dialogue meeting
Discussed 5 important areas: import duties/custom/trade facilitation, licenses and investment in services sector, financial flows, tax regime and pharmaceuticals.
Tel: +880 2 5566 8057 ext. 119
In response to the Rana Plaza tragedy, in July 2013 the EU jointly created the Sustainability Compact, together with the ILO and the US and Bangladeshi governments, which will run until 2018.
The goal is to help the Bangladeshi garment industry improve workplace safety, labour rights and general business conduct – by opening a dialogue with stakeholders, including trade unions, employers, buyers and NGOs, in both the EU and Bangladesh.
The Compact has brought tangible progress in workplace safety and working conditions in the industry. A number of labour rights are better protected in Bangladesh today than they were when the Rana Plaza tragedy happened.
Other action in this area by the EU and its member countries includes:
- the Accord on Fire and Building Safety in Bangladesh, an initiative by leading EU brands and retailers sourcing Bangladeshi garments.
- low-cost loans from France, Germany and the EU, to help small/mid-sized firms invest in factory safety improvements.
The EU monitors the Compact jointly with the ILO, involving regular meetings (October 2014, January 2016). The next meeting is scheduled in 2017.
In Dhaka, a high-level group – the 3+5+1 – also regularly reviews progress with the Compact.
Status report for the Compact – July 2016
ILO page on the Compact
ILO-IFC report on financing for safety improvements (2016)