This landmark decision has culminated into a safeguard for the existing one billion dollar export from Bangladesh to Canada and future growth in the apparel sector.
Earlier in December 2012, the review of the GPT guidelines proposed that if at least 60% of the value of a product had not been from raw materials from one or more of the GPT beneficiaries, the exporter country would lose the GPT facilities in Canada.
The challenge for Bangladesh was that more than 90% of the imported raw materials were from countries which would cease to be GPT beneficiaries after June 2014.
As per the proposed review of the Rules of Origin, Bangladesh was supposed to lose GPT facilities, i.e. duty and quota free access for its RMG export to Canadian market due to Bangladesh’s high dependence on future graduating countries from the GPT regime, like India, China, Thailand, etc.
Even though Bangladesh and likewise countries under the Least Developed Country Tariff (LDCT) would continue to get GPT facilities beyond 2014, the consequences of the proposed review of the Rules of Origin was about to create a collateral damage to Bangladesh’s RMG sector and its export to Canada.
The Canadian Budget 2013 has, therefore, announced the following:
"The Government (of Canada) will also ensure that graduating countries from the GPT regime does not reduce the benefits of the Least Developed County Tariff (LDCT) regime. The General Preferential Tariff and Least Developed Country Tariff Rules of Origin Regulations will be amended in order to continue allowing the duty-free importation of textiles and apparel from least developed countries that are produced using textile inputs from current GPT beneficiaries."
The High Commissioner of Bangladesh to Canada, Kamrul Ahsan said that the Canadian decision comes as a great relief after intense diplomatic efforts with the Canadian Government. In this regard, the High Commissioner thanked the Ministry of Foreign Affairs, Ministry of Commerce as well as BGMEA for their all out support to Bangladesh High Commission in Ottawa for maintaining close coordination.
He added that this decision would not only ensure the continued growth of Bangladesh-Canada trade relations but also save the employment of thousands of women workers in the apparel industry in Bangladesh.
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