Relations between the EU and Bangladesh
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The EU is broadly supportive of the Bangladesh government's reform agenda, and emphasises the need for it to deliver on its promises and ensure compliance with its human rights obligations.
The main areas where the EU helps Bangladesh are economic development, human rights, good governance and the environment.
Under its Multiannual Indicative Programme for Bangladesh 2014-2020, the EU has committed new aid of up to €690 million.
Today, by revenue, over half of Bangladesh’s exports go to the EU. (55.5% in first quarter of 2016, according to Bangladesh Bank).
This is due largely to the highly advantageous trade terms granted by the EU (the "Everything but Arms" (EBA) scheme).
Bangladesh now enjoys a significant trade surplus with the EU (Bangladesh-EU trade statistics).
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
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:
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).
Guidelines on how to apply the tariffs – Communication COM (2004)461.
Investment by European companies in Bangladesh offers the following advantages:
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.
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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 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.
EU development assistance – around €500 million in 2015, including bilateral aid from EU countries – focuses on:
Main funding – under the EU’s Development Cooperation Instrument (DCI).
Additional EU funding
Key strategy documents
EU-Bangladesh cooperation strategy (2014-20)
Bangladesh Poverty Reduction Strategy
DCI funding is directed by multi-annual indicative programmes (MIPs) and annual action plans – all agreed and coordinated between the EU, the Bangladesh government, local stakeholders and other development partners.
Alongside EU assistance, some EU countries provide separate assistance to Bangladesh through their own bilateral arrangements:
The EU's humanitarian arm, ECHO, supports the following in Bangladesh:
1. Disaster preparedness
For example building flood-resistant infrastructure and early warning systems.
2. Emergency response
In particular for tropical storms and heavy monsoon rains, which cause severe floods.
Support includes building transitional shelters, latrines and wells, providing food security and nutrition, as well as educational awareness surrounding water and sanitation.