The European Commission (EC) has accepted Bangladesh plea for derogation in the rules of origin to obtain GSP in knitwear export, clearing ways of increased exports to Europe in a relaxed condition, reports UNB.

The acceptance came from a meeting of the Committee of the Rules of Origin of the EC yesterday in Brussels, the headquarters of the European bloc, according to a message received in Dhaka from the Belgian capital.

It says the derogation will come into effect from October 15 after formal approval by all the 20 EC commissioners of 15 European Union countries.

"It's a great achievement for the country. Commerce Minis-

ter Tofael Ahmed told UNB. "A long-standing problem related to export of Knit garments to the European countries has been resolved.”

He said the derogation would help Bangladesh increase its knitwear exports to the EU. Bangladesh's second-largest export market from where the country earns over 75 per cent of its export income from knit garments.

The minister said the acceptance of the EC, which expressed its satisfaction over the government's bold steps in dealing with the GSP problem, would help Bangladesh augment its export income to 10 billion US dollars in five years.

The EC accepted Dhaka's re-

quest for the relaxation in the clause after the Bangladesh authorities had withdrawn 13.584 'faulty' GSP certificates and agreed to carry out investigation into another lot of 2253.

Earlier, the Commission had asked Bangladesh to cancel 6910 generalised system of preference certificates and investigate another 8562 for obtaining a derogation in the rules-of-orlgln clause of GSP.

With the relaxation. Bangladesh knitwear producers will be able to export their products made of imported yarn under the two-stage transformation instead of the current three-stage transformation.

Two-stage transformation means Bangladesh exporters

can produce their items from locally produced fabrics, not necessarily locally produced yarn. The two-stage transformation is from any yarn to fabric and fabric to ready-io-wear Items.

Under the present three-stage condition, the manufacturers must use locally produced yarn to knit their fabrics, adding another stage in the transformation of cotton to garments.

Officials in Dhaka felt that the derogation was result of government effort to uphold the image of the nation and ensure transparency and accountability in dealing with things.

They said derogation would bolster the knit garment export to EU countries which warrants more new garment industries, backward-linking industries and more employment.

The EC conceded the Bangladesh appeal after many rounds of negotiation, persuasions and correspondences with the leaders of the Commission and the officials of the EU countries since January.

Commerce minister Tofael went to Brussels twice in last 10 months. His last visit in September saw meetings with two EC vice-presidents — Sir Leon Brittan and Manual Marin Gonzalez — and Commissioner Mario Monti.

■Hie last round of talks between the minister and EC officials prepared the ground for hammering out a decision in favour of Bangladesh. In the meetings, all the three top executives highly appreciated the courage, sincerity and transparency of the government in tackling the Irregular GSPs issued during the past regime.

They had assured the minister that Bangladesh would get derogation Tn the following meeting of the EU countries scheduled for October 8-9 in the

EC headquarters.

Tofael convinced the EC about the Justification of allowing derogation for Bangladesh. He also had bilateral talks with the envoys of EU countries in Bangladesh and other ministers of those countries with a view to mustering both diplomatic and political support.

The derogation is likely to be adorable to EU importers also as they urged t^e commerce minister In two meetings during his last Brussel's visit to pursue this.

They told him that derogation of rules of origin for Bangladesh would be a unique step to maximize the export as it could do the export with very competitive price.

Tofael Ahmed is also opti-misUc that Bangladesh's exports to the EU countries would mark a rise due to the derogation in knitwear garments while the country would receive EU support in various fora.

“It will be very good for the Bangladesh exporters. On the other hand, the importers would come in a bigger way to place their orders in Bangladesh for its competitive price in world market." he said.