After 2029, Bangladesh may face 12-per cent tariffs on exports to the EU, while Vietnam, Pakistan and Sri Lanka would face zero tariffs due to free trade agreements and the Generalised System of Preferences Plus (GSP+) scheme, the study by Dhaka University noted.
“For every 10 per cent tariff imposed by the EU, Bangladeshi exporters will lower pre-tariff prices by about 4 per cent to remain competitive,” Deen Islam, an associate professor at Dhaka University who presented the study at a recent seminar, was quoted as saying by a domestic media outlet.
Bangladesh apparel exporters need to absorb about two-fifths of the tariff they may face after the grace period for graduating from the LDC status to export to the EU, according to a recent study.
After 2029, Bangladesh may face 12-per cent tariffs on exports to the EU, while Vietnam, Pakistan and Sri Lanka would face zero tariffs, it noted.
An appreciating currency has been eroding competitiveness.
The seminar was organised by the Research and Policy Integration for Development and the International Growth Centre at the Dhaka University.
The study also showed that the top ten apparel items have an average weighted price of about 36 per cent lower than that of China and Vietnam.
He said even Cambodia, another LDC, achieves a higher average price than Bangladesh.
Bangladesh is scheduled to graduate from the LDC category in 2026, with a transition period allowing temporary continuation of specific trade preferences.
Experts said that LDC graduation could pose a threat, as exporters might bear a large share of the tariff costs; however, early and coordinated preparation could soften the transition’s impact.
An appreciating currency has been eroding competitiveness, the study found.
The woven sector is more vulnerable due to its heavy reliance on imported raw materials, it noted.
Islam added that Bangladesh should immediately establish a dedicated trade negotiation pool or a specialised wing within the government to conduct trade talks in a professional and coordinated manner.
Fibre2Fashion News Desk (DS)
