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Chinese boon for RMG

97pc duty-free access offered


Published : 25 Aug 2020 09:43 PM | Updated : 06 Sep 2020 04:08 PM

The Chinese government has offered zero tariff facility to 97 percent importables from Bangladesh.

The country's readymade garment (RMG) sector sees this opportunity as a boon as it is struggling badly due to the coronavirus pandemic. This offer is virtually found as a great relief to apparel manufacturers.

"With the supply chain of the industry disrupted by the lethal virus, the Chinese government offer means cent percent of the sector's products are going to enjoy duty-free market access. 

“However, we have to analyse which products can give us greater returns," said Anjan Shekhar Das, director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). 

A total of 8256 Bangladeshi products will have zero tariff access to the Chinese market under the declared duty-free export facilities.

The sector insiders and economists said that as China imported around $25 billion worth of clothing and textile products, Bangladesh has a huge untapped opportunity ahead.

According to World Trade Statistical Review, 2020 by the World Trade Organization (WTO) China imported clothing products worth $9 billion in the last year, while it also imported textile goods worth $16 billion.

Anjan further said, "Earlier, India also offered us zero tariff facilities, but later they added anti-dumping duty for which our exports there faced complications. However, if everything goes well and if we can identify our potential products by discussing with the  commerce ministry and other trade bodies and associations, we are optimistic that our export to the Chinese market will increase."

In the recently concluded 2019-2020 fiscal, apparel export to China was $ 330 million against around $ 507 during 2018-19.

According to BGMEA, earlier the sector's exporters used to enjoy 60 percent items of all the traffic lines, which has now risen to 97 percent.

The sector leaders were, however in a dilemma over how to grab the new opportunity as there are two options. 

The first one is the Asia Pacific Trade Agreement (APTA) which has few product coverages and the other one is LDC through WTO which has a wide range of product coverage. Later, the government decided to go for LDC.

Senior Vice President of Bangladesh China Chamber of Commerce and Industry A T M Azizul Akil told Bangladesh Post, “This is undoubtedly a huge opportunity for us. But our local bureaucracy and business bureaucracy should play the leading role in this. There is some complication that needs to be addressed to expand the country’s export there”.

“We have not been able to take advantage of the zero tariff facility to 97 percent of products, which has already begun. Besides RMG goods, we have to identify which products have a vast demand there. It is high time we focus on all our potential products like leather, jute and jute goods, foods, agriculture, fish, and others,” he added.

According to Commerce Ministry information, the country has been enjoying zero tariff facility on 60 percent of export items to China since July 1, 2010 under Asia Pacific Trade Agreement (APTA) for LDCs, for which it had not been able to expand its export volume there.