Further to my previous email regarding the new tariff scheme of the United Kingdom, i.e. Developing Countries Trading Scheme (DCTS), I am writing today to share with you the developments on Canada’s tariff treference trograms for developing countries including Bangladesh.
As you know that Canada extends duty free market access to developing countries under the General Preferential Tariff (GPT) scheme. Bangladesh enjoys complete duty free and quota free access in Canada since 1 January 2003 under Least-Developed Country Tariff (LDCT) scheme which falls under the GPT. As the GPT scheme is being renewed in every 10 years, the existing version of GPT is going to expire in the end of 2024.
The good news is that the Canadian Parliament has approved the finance bill where the GPT scheme has been extended till end of 2034. What is important to notice here is that the Federal Budget aims to realign the GPT with the ongoing trade dynamics, sustainability priorities and the economic context of the beneficiary countries. More important to note that the Canadian Government has created a new scheme under its GPT which is referred to as ‘GPT+’. As the Canadian official site reads “This proposal would look to expand product coverage under the GPT program (i.e. referred to as GPT+), whereby developing countries that meet and progressively improve their adherence to international labour rights and environmental standards would be eligible for additional tariff benefits beyond what is provided through the GPT program. The goal is closer alignment of Canada’s non-reciprocal tariff programs with broader trade and development policy objectives, including those pursued under Canada’s free trade agreements (FTAs)”. Please visit the following link to get more information from the Department of Finance Canada’s website for a comprehensive understanding of the benefits and proposed changes.
BGMEA has been actively pursuing the matter of smoother transition after the LDC graduation takes effect with our major trade partners. I have already shared with you the developments for U.K., We are also engaged with the Government of Bangladesh regarding this issue. We have got positive feedback from the Australian Government officials regarding continuation of duty free market access after the graduation from LDC.
Canada is one of the major markets for Bangladesh’s apparel. In FY2022-23 our RMG export to Canada reached US$ 1.55 billion, which was US$ 1.33 billion in FY 2021-22, showing 16.55% growth. However, the share of Canada’s import from Bangladesh remains only 13.95%, meaning that we have a significant potential to further penetrate in this market. With the GPT+ ahead, we should aim for a bigger pie and focus our efforts and resources to maximum this potential.
We appreciate and thank the Government of Canada for this timely policy move. With the transformation that our industry is making toward safer, cleaner, greener and sustainable workplace, and the overall infrastructural progress in our country, I believe its time for us to take our bilateral trade to a new height.
