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Bangladesh\u2019s ready-made garment sector remains the country\u2019s main export earner and has historically relied on low labour costs, a large workforce and preferential market access, according to a policy paper titled \u2018From Compliance to Competitiveness: The Growing Importance of Labour Issues for Bangladeshi Exporters in the European Union and the United States,\u2019 authored by economist Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), and published this month.<\/p>\n
Bangladesh’s garment exporters face tougher labour and traceability requirements in the EU and US, with compliance increasingly affecting market access, shipment clearance and buyer decisions.
\nSmaller factories could face greater risks from limited compliance capacity, while stronger labour and safety systems may help exporters secure stable buyer relationships and improve competitiveness.<\/p>\n
The paper said the EU and the US are Bangladesh\u2019s two largest apparel export destinations. The EU accounts for about half of the country\u2019s apparel exports under duty-free, quota-free access through the Everything But Arms (EBA) scheme, while the US is the largest single-country market but does not provide comparable tariff benefits.<\/p>\n
Bangladesh\u2019s export model is coming under pressure as Western markets tighten labour and supply-chain rules, while the country\u2019s graduation from least developed country (LDC) status is expected to reduce some tariff advantages. Labour standards are now linked not only to domestic or ethical concerns but also to buyer decisions and export competitiveness, the paper mentioned.<\/p>\n
For EU-bound shipments, exporters face new requirements covering corporate due diligence, sustainability reporting and forced labour. The EU Forced Labour Regulation, due to apply from December 2027, could prevent goods made with forced labour at any stage of production from entering the EU market.<\/p>\n
Bangladesh is expected to retain benefits equivalent to the EBA scheme for three years after its LDC graduation but could lose them around the end of 2029. Under the revised EU Generalised Scheme of Preferences (GSP), Bangladesh may need to qualify for GSP+ to retain wider duty-free access after the transition period, as per the paper.<\/p>\n
In the US market, compliance pressure comes through customs enforcement and private buyer requirements. US law prohibits imports made wholly or partly with forced labour. As many Bangladeshi garment factories use cotton, yarn or fabric sourced from China, exporters may need to provide documentation showing that restricted inputs have not entered their supply chains.<\/p>\n
Large US buyers also require suppliers to comply with codes covering child labour, forced labour, worker rights and factory safety. Weak traceability, it warned, could result in shipment delays or buyers cancelling orders.<\/p>\n
As requirements widen, Bangladeshi exporters may need to maintain detailed information on workers, subcontractors and the origin of inputs. Buyers may increasingly seek visibility beyond garment factories to the sources of fabric, yarn and other raw materials.<\/p>\n
The adjustment burden is expected to be heavier for small and medium-sized factories and subcontractors. Larger exporters are better positioned to invest in digital records, traceability tools and worker grievance systems, while smaller units often continue to rely on paper-based documentation.<\/p>\n
This capacity gap could strengthen the position of larger exporters while putting smaller factories and subcontractors at risk of losing orders and employment, The paper warned. At the same time, factories with stronger labour and safety systems could benefit from more stable buyer relationships, fewer disruptions and better access to demanding sourcing programmes.<\/p>\n
Strong labour inspections, faster dispute settlement, shared digital compliance systems and greater support for smaller exporters are needed. Industry associations should develop common traceability platforms, pooled training programmes and systems to reduce repeated audits. Exporters should integrate labour compliance into their production strategies rather than treating it as a pre-audit exercise. This includes mapping suppliers and subcontractors, improving record-keeping and traceability, and strengthening worker grievance and participation mechanisms, the paper recommended.<\/p>\n
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Fibre2Fashion News Desk (CG)<\/p>\n
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