GSP status and Free Trade Agreements in Bangladesh

GSP facilities

Bangladesh enjoys Generalised Scheme of Preferences (GSP) status in 37 countries (28 EU member states, Australia, New Zealand, Norway, Switzerland, Japan, Turkey, Canada and Russia and Belarus). GSP provides exporters with reduced or zero duties when exporting seafood products. The most important markets for seafood exports are the EU, the US and Japan. The EU market Bangladesh benefits from the EU’s “Everything but Arms” arrangement, which grants duty free, quota free access for all exports, except arms and ammunition. As a result Bangladesh pays 0% duty, which gives it a considerable advantage over countries like India that do not enjoy GSP or GSP+ status. The US market Bangladesh was included in the US its GSP facility from 1980 but President Obama suspended Bangladesh from GSP in June 2013 after the Rana Plaza factory collapse. Although Bangladesh has made progress to address fire and building safety issues, the US announced in 2015 that further progress is needed, including to address serious worker rights issues, before reinstatement of Bangladesh’s trade benefits under GSP can be considered. As a result Bangladesh pays normal duties form shrimp exported to the US. Luckily, Bangladesh is not charged with anti-dumping duties such as India and Vietnam. The Japanese market Although some fishery products are included in Japan its GSP facility, shrimp is not. Fishery products granted GSP in Japan only have a 4% duty. For shrimp, normal duties apply.

Free Trade Agreements 

Bangladesh is involved in six free trade agreements of which three are already signed and in effect, one is signed but not yet in effect, and two more are under negotiation (ADB 2016).
  • Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Area Negotiations launched
  • Pakistan-Bangladesh Free Trade Agreement Negotiations launched
  • Trade Preferential System of the Organization of the Islamic Conference Signed but not yet in effect
  • Asia-Pacific Trade Agreement Signed and in effect
  • Preferential Tariff Arrangement-Group of Eight Developing Countries Signed and in effect
  • South Asian Free Trade Area Signed and in effect