Clothing suppliers, who benefit from duty-free access to the UK might suffer as a result of Brexit unless special terms of access are negotiated, according to a report from Textiles Intelligence.
It said suppliers in major clothing exporting countries, including Bangladesh, could be excluded from preferential access to the UK market when Britain leaves the European Union (EU).
UK has decided to come out from European Union after the historical poll that chose ‘Brexit’ by 52 per cent to 48 per cent. The exit process would take more or less two years as per the law mentioned in Article 50 of EU.
“We are worried about the possible Brexit fall out on our industry as Britain has been considered to be a key market for local apparels,” Ferdous Pervez Bivon, Vice-Present of BGMEA told The New Nation on Sunday.
He said, the local suppliers have already consolidated their position in the market taking advantage of duty-free access. Their exports to the market have seen a significant growth in last five years.
“Impact of Brexit on our exports could be easily evaluated if the current value of bilateral trade between Bangladesh and the UK is analysed,” he added.
Bovon said, the issue is very critical and the government should properly pay heed to this to keep unhurt our garments export to the country.
‘”The government should take immediate action so that the trade benefit remain, as usual even after Britain’s divorce from the EU,” he said.
In 2015, the UK was the EU’s second largest clothing import market in value terms after Germany, with a 17.7 per cent share of EU clothing imports into all member states.
Bangladesh exported more than $3.5 billion to UK in 2015, and of the total export to UK, RMG goods accounted for over 50 per cent share ($1.62 billion)
Because the UK is a member of the EU, exporters in many developing countries, including Bangladesh, Cambodia, Myanmar, Pakistan and Peru,enjoy duty-free access to the UK textile and clothing market under arrangements of the EU’s Generalised Scheme of Preferences (GSP).
But if and when the UK leaves the EU, imports into the UK from countries such as Bangladesh and Cambodia will, by default, be subject to a common external tariff as declared to the World Trade Organization (WTO).
“Britain’s exit from the EU could have major consequences for the suppliers from developing countries by lowering their exports to the country,” Abdus Salam Murshedy, President of the Exporters Association of Bangladesh (EAB) told The New Nation yesterday.
He said, “Bangladesh would be the top losing country given the current size of its apparel exports and industry.”
Murshedy further said clothing export accounts for over 80 per cent of Bangladesh’s total foreign trade and any shock from the UK market as a result of Brexit could leave a knock-on effect on its export basket.
“Considering the fact, the government must go for an early negotiation with the British authorities so that a special trade agreement is put in place to keep the preferential access intact to the UK market,” he said.
Bangladesh’s apparel export reached $28.09 billion in the last fiscal year (2015-16), registering 10.21 per cent growth over the previous fiscal.
RMG products accounted for 82 per cent share of its total export that hit $34.25 billion during the period.
