The exports of readymade garments from Bangladesh to Chile are likely to get a boost as the Latin American nation has recently announced duty-free treatment to imports from all the 49 least developed countries (LDCs), including Bangladesh.
According to Chile’s Ministry of Finance, under the new trade preference policy, Chile would phase out duty on imports from all LDCs over a three-year period, starting with seven vulnerable countries (with concentration index greater than 0.75)—Angola, Chad, Equatorial Guinea, Sudan, South Sudan, Yemen and Guinea-Bissau—with immediate effect.
The second phase of duty reduction would be applicable from January 2014 and the third phase from January 2015.
Bangladesh, being a LDC, is also likely to be benefited by Chile’s new policy in near future.
In Bangladeshi fiscal year 2012-13 that ended on June 30, garments constituted over 90 percent of the US$ 30.37 million worth of exports from Bangladesh to Chile, according to the Export Promotion Bureau (EPB) data.
The Chilean policy is in accordance with the recommendations of the World Trade Organisation (WTO) at its 2005 Hong Kong ministerial declaration, which established that developed and developing countries with capacity to do so would allow duty- and quota-free access to at least 97 percent of imports originating from the LDCs.
The commitment to the WTO has already been partially or wholly implemented by some countries, including Australia, Japan, China, Canada, India, Norway, South Korea, the United States and the European Union.
However, certain countries do not give duty-free access to some sensitive products from LDCs. For example, the US excludes textile and apparel from its Generalised System of Preferences (GSP) programme.