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EU to ease GSP rules of origin: Tofael
The European Union (EU) has agreed for derogation of a law relating to the GSP for Bangladesh's knit apparels, ending the apprehension about continuation of the duty-exemption facility.
'They (the officials of the EU) have agreed to derogate from the rules of origin clause of the GSP . we are expecting announcement from them
within a couple of months," Commerce Minister Tofael Ahmed said yesterday.
Talking to UNB at the airport on his return from Belgium. where he went to negotiate with the EU the future of the generalised system of preference (GSP). Tofael said the EU officials had realised Bangladesh's point for GSP continuation.
During the five-day trip to Brussels, the EU headquarters, the Bangladesh minister met with EU Vice-presidents Sir Leon Brittan and Manuel Marin and discussed details of the GSP and readymade garment industry.
"We have informed them of our problem with the rules-of-origin criteria for getting the GSP facility." said Tofael. flanked by his entourage members including manufacturers of garment and knitwear.
In the meetings, the minister requested both the officials to derogate the rules-of-origin
clause of the GSP for three years for knit items and upto the year 2005 for sweater and pullovers.
"They have agreed in principle to our proposal," he said, adding that the GSP facility “is going to be continued for the country’s readymade garment industry".
Bangladesh exports knit items, sweater and pullovers worth 450 million US dollars to the European markets and enjoys a 12 per cent duty exemption in exporting the products under the GSP facility.
But for qualifying for GSP. the EU has imposed a condition related to rules of origin and asked the countries willing to avail the facility to achieve a three-stage transformation — from fibre to yarn, yarn to fabric and fabric to garment — for knit garments and two-stage transformation — from yarn to fabric and fabric to garment — for oven garments.
The criteria for knit items appeared to be a serious prob-
lem for Ban',' ^ii uecause it does not produce enough cotton while sufficient spinning mills are yet to be set up to meet the growing demand of the’ knitwear industry.
Recently, an inspection team of the EU detected huge consignments having fake certificates that those were of Bangladesh origin, although those were originally not. The certificates were issued by Bangladeshi authorities.
This angered the EU authorities and they threatened to stop the facility for the garment sector unless the a.Jhorities here take necessary meas„. to end such fraud.
The minister informed the EU officials that the government had already constituted a high-powered monitoring committee to ensure greater transparency in Issuing GSP certificates for export to EU.
They highly appreciated the measures already taken by the government." he said of the four-member monitoring committee, headed by director general (textiles) of the Export Promotion Bureau (EPB).
He said the condition of rules of origin was breached during the past government which did not lobby the EU that Bangladesh does not have abil ity to meet the condition of three stage transformation.
Bangladesh will not need any GSP when the European countries would allow products from here a zero tariff as agreed during the World Trade Organl sation meeting in Singapore, he said.
"But we have to develop our own textile and backward link age industries by the year 2005 to maintain our competitive ness in the world market, the minister said