Despite China offering duty-free market access to 97 per cent of Bangladeshi products, the step is not helping much readymade garment (RMG) exports to the Chinese market as more than a third of Bangladesh’s total apparel exports to that country is still out of duty-free benefit coverage.
According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Rubana Huq, Bangladesh’s total garment exports to China in fiscal 2018-19 was $507 million, of which $308.4 million worth such items enjoyed duty-free benefits, which implies, $198 million worth apparel exports was levied duty.
Garment products worth $20 million out of that $198 million would be included in the latest duty-free scheme, she was quoted as saying by Bangla media reports.
In June, the Tariff Commission of the Chinese State Council issued a notice on granting zero treatment to 97 per cent of tariff products of Bangladesh to its market effective from July 1.
China then included additional 5,161 Bangladeshi products to enjoy zero-tariff treatment in its market. Prior to that, 3,095 Bangladeshi products were eligible for duty-free access to the market under the Asia -Pacific Trade Agreement.
“Almost $178 million RMG exports are still excluded from the duty-free access, which is 33 to 38 per cent of our total RMG export to China,” Huq said, adding that these exportable Bangladeshi RMG faced 6-12 per cent duty there.
The BGMEA leader also expressed concern over the revised rules of origin for 40 per cent value addition set by China to avail duty-free access to the market.
Bangladesh would have to add 40 per cent value to get duty free benefit in China, she said, adding that it would be challenging for the exporters to comply with the new rules of origin. Earlier, the threshold for value addition was 30 per cent for the China market.
Bangladesh’s RMG export to China declined by 34.35 per cent to $72.21 million in the first quarter of fiscal 2020-21. It was $109.99 million during July-September period of the last fiscal, according to official data.