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Bangladesh RMG exporters expect order shift from Cambodia

Feb '20
Pic: Shutterstock
Pic: Shutterstock
Bangladesh’s readymade garment (RMG) exporters feel the suspension of the European Union’s (EU) generalised scheme of preferences (GSP) to Cambodia may lead to a rise in export orders for their country in the EU market as RMG products produced by both are similar. Vietnam would solely benefit from the shifting of orders for high value-added products, they said.

Buyers may shift their sourcing from Cambodia to other countries due to the rise in the prices of products manufactured in the Southeast Asian country because of payment of duties due to the suspension of the GSP facility, exporters were quoted as saying by a Bangla newspaper.

The EU recently partly suspended the GSP facility for Cambodia. Bangladesh is the second largest exporter of RMG product to EU market with around $21 billion of annual shipments as it gets GSP facility in the EU market.

According to Bangladesh Garments Manufacturers and Exporters Association (BGMEA) president Rubana Huq, her country has to prepare in the longer term so that it can continue to have its market access either through extension of Everything But Arms (EBA) negotiation or lobbying for the GSP plus, for which the labour narrative will be a predominant factor.

She said the GSP suspension would certainly put Cambodia’s apparel industry in a challenging situation as they would now need to pay 9 to 12 per cent duty on their exports to the EU.

BGMEA data showed that the EU imported apparel worth $4.33 billion from Cambodia in 2018 while its total apparel exports to the world in the year stood at $7.83 billion.

Fibre2Fashion News Desk (DS)

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