19/01/2014: No EU plan to scrap GSP

No EU Plan to scrap GSP

Envoy makes it clear the duty-free facility has nothing to do with politics

Published: 12:02 am Monday, January 20, 2014

The European Union has no plan to cancel the GSP facility for Bangladesh at the moment.

"That continues to be the case, and we are not considering any trade measure at this stage," he told reporters at his office in the capital.His comment comes amid news reports that the EU might reconsider the GSP benefit for Bangladesh following the January 5 election boycotted by the BNP. The EU is Bangladesh's biggest export market, and about half the country's more than $27 billion exports went to Europe in the last fiscal year despite the downturn in the continent. Following the general election, where the EU did not send any observers, its high representative for foreign affairs Catherine Ashton released a statement on the one-sided polls. Last week, the European Parliament passed a resolution on the political developments in Bangladesh.

"Neither document mentioned the question of trade. So we are not considering any change to the GSP at the moment," said Hanna.  Before reconsidering the GSP, he added, the EU would probably review the progresses Bangladesh made in meeting its commitments to improve labour and factory conditions in the next couple of months."We will have to sit down with the government to see where we are."The government signed a tripartite agreement -- called the Sustainability Compact -- with the International Labour Organisation and the EU in Geneva last July after the collapse of Rana Plaza building, which killed at least 1,132 people, mostly garment workers.

Earlier in June last year, the US scrapped the GSP benefit for Bangladesh over factory safety and poor working condition. But according to Hanna, there has been progress in some areas and there are some areas that need to be improved.Bangladesh should specifically speed up its recruitment process for new inspectors and set up the database for factories, he said.

"The recruitment of inspectors is not as quick as expected as committed in the agreement. The database of information about factories has not yet been properly set up."Hanna said the GSP was important for Bangladesh as well as for Europe. "We want to continue to source from Bangladesh. And our companies are interested in continuing to invest."

The envoy mentioned that both the statement and the resolution had called on the Awami League and the BNP to enter into dialogues and have an agreement, which would be the way forward for elections.  

He said the EU had always maintained that elections should have three characteristics: transparency, inclusiveness and credibility. "That is our position at the moment."
Asked if the EU was supporting the government given it had yet to send any official greetings to the new administration, he replied indirectly: "I don't think that it is a question of supporting the government.

“I was at the swearing-in ceremony. I greeted everyone there. We have a long relationship with Bangladesh and we have been involved in assisting its development for a long while."
Although the trade relations have become a key one over the decades replacing aid, the bedrock of the EU operation remains the same: to support democracy and human rights, he said.
"On those questions, we have expressed our concerns and we hope that there will be improvement in those areas."He also said the attacks on Hindus should be investigated and the due process of law should prevail.  

Hanna asserted the development cooperation between Bangladesh and the EU would also continue like before. The EU is now discussing its development cycle for Bangladesh for the next seven years, starting this year.


The core areas of development assistance such as education and skills, food security, nutrition and human rights and governance would remain unchanged, he added.
Currently, Bangladesh benefits from the most favourable trade condition under the Generalised System of Preferences, as no tariff is imposed on the country's products entering the 28-nation bloc, EU Ambassador in Dhaka William Hanna said yesterday.