BD textile sector opposes EU's new GSP criteria

November 27, 2010
Nation. Com

LAHORE - The Bangladesh Textile Mills Association (BTMA) has opposed the new criteria of the EU Commission, which has allowed 14 Least Developed Countries the GSP plus status for exporting duty-free goods to the European Union countries, on the ground that substantial investment has been made in Primary Textile Sector (PTS) in its country.

The Bangladesh Textile Mills Association said that a huge investment of $4 billion has been made on spinning and weaving in the country to get the benefit of GSP facility on supply of yarn and fabric to local garments manufacturers but after the revision of ‘Rules of Origin’ by the European Union Commission their all investment would go wasted.

Dr Mirza Ikhtiar Baig, Federal Advisor on Textile, said that Bangladesh was one of the major beneficiary to this concession which had boosted their textile garments export.

He observed that Bangladesh was the major importer of textile fabrics from Pakistan but the duty-free concession of garments export to the European Union was only allowed if the garments were made from locally manufactured fabric i.e. if the fabric is of Bangladesh origin.
This restriction had seriously discouraged their import of fabric from Pakistan.

Moreover, to support their local industry, Bangladesh government allowed 5% rebate to their garments exporters if the fabric is procured from the local Mills.

Dr Baig said that he took up the matter in the European Union commission on 20th October 2009 in Brussels to change the rules of their certificate of origin which eliminates the existing two step process for production of readymade clothing.

This would mean that imported fabrics can be used by LDCs and they can still get duty free GSP plus status for exporting to EU countries.

Finally European Commission (EC) has adopted the new regulation effective from 1st Jan. 2011 with the new rules of certificate of origin, he added.

Pakistan will be the main beneficiary of exporting fabric to Bangladesh, Vietnam, Cambodia and many other African countries, Dr Baig informed.

He thanked European Commission and said that the new rules will help the developing countries including Pakistan to benefit from the trade preferences.

He advised our fabric exporters to get the maximum benefit of this concession to enhance Pakistan textile exports.