UK Offers Duty Free access for 92% Bangladeshi Exports

Bangladesh will be granted duty-free export privileges for 92% of tariff line items, including ready-made clothing (RMG), in the UK market after leaving its Least Developed Country (LDC) classification.

According to sources present at a meeting of the joint working group established for the promotion of bilateral commerce and investment between the two countries, the UK has also guaranteed Bangladesh that the current prohibition on exporting betel leaf from the nation will be lifted.

"The UK delegation praised the generosity and adaptability of their Developing Countries Trading Scheme. After achieving Least Developed Country status, Bangladesh will be granted duty-free export privileges for 92% of manufactured goods, including clothing, according to UK policy, according to Md Abdur Rahim Khan, additional secretary (Export) of the commerce ministry, who led the Bangladesh delegation at the meeting yesterday in the capital.

After LDC graduation in 2026, according to officials in the commerce ministry, the UK would continue to offer Bangladesh certain privileges under the Generalized Scheme of Preferences (GSP) for three years as a transition phase. 

The World Trade Organization has received an application from the group of least developed nations, which includes Bangladesh, asking for GSP advantages for six years following LDC graduation. Dhaka also suggested at the joint working group meeting yesterday that the UK maintain the facilities for six years after LDC graduation as a transitional phase.

A senior official present at the meeting was informed by the UK delegation that they will consider the issue at their policy level.

Before Brexit, the European Union put a nearly ten-year import restriction on betel leaves from Bangladesh. The EU abolished the prohibition in 2021, but the UK still imposes it.

According to Md. Abdur Rahim Khan, the UK delegation responded to Bangladesh's appeal yesterday by stating that they will follow the EU's decision to eliminate the export restriction on betel leaf and consult with their Food Standards Agency.

During the conference, Bangladesh also talked about boosting the export of agricultural goods to the UK, particularly frozen fish, shrimp, meals, mangoes, and vegetables.

The UK, on the other hand, has placed a strong focus on the creation of laws governing international higher education and the protection of intellectual property rights.

Data from the trade ministry show that Bangladesh's exports of goods to the UK reached a peak in fiscal year 2022–2023 (FY23) at $5.3 billion, up from $4.8 billion the year before and more than twice the amount from ten years earlier when it was just $2.7 billion.

Prepared clothing, frozen food, IT, engineering, leather and jute products, bicycles, and frozen food are some of the major exports that helped make this feat possible. 80% or so of exports are made up of knit and woven clothing. 

The value of Bangladesh's imports from the UK from January through May in FY23 was $380 million. By the end of the fiscal year on June 30, it was anticipated to be approximately $450 million, according to a senior official in the trade ministry.

Currently, the UK is the third largest export destination for Bangladesh, following the European Union and the United States.