Dhaka wants continuation of GSP two-stage transformation criteria

The government will sit with European Union (EU) leaders soon to continue the existing two-stage transformation criteria for the Generalised System of Preferences (GSP) for Bangladeshi apparel products to the EU, said Commerce Minister Faruk Khan yesterday.The existing two-stage transformation system will expire in 2010 and the EU sought changes in rules and introduction of single transformation criteria to gain duty-free and quota free facilities to the EU nations.The two-stage transformation criteria means the fabric must be made by the apparel manufacturing country, but under single transformation the source of the fabric would not be questioned to receive the duty-free and quota-free market access to the EU.The minister said he would arrange a seminar in Dhaka in July or August to convince the EU ambassadors here on continuation of the GSP facility up to 2015."If necessary, we would go to Brussels, headquarters of the EU, to convince the EU leaders," Khan told reporters after a meeting with the Bangladesh Textile Mills Association (BTMA) leaders at his secretariat office.He said he would soon write to the EU ambassadors and other concerned officials to convince them in this regard, as the country's apparel industry would suffer without such a facility.At the meeting, Abdul Hai Sarker, BTMA president, said his organisation is lobbying with the EU for continuation of the two stage transformation GSP criteria up to 2015 for the growth of Primary Textile Sector (PTS).The EU has extended the GSP facility to Bangladesh over the last three decades, as it is a least developed country (LDC), Sarker said. "If the single transformation criteria is introduced, in place of the existing facility, the total investment of Tk 40,000 crore in the PTS would be under threat. This is why we are demanding continuation of the two stage transformation system in GSP attainment," Sarker said. Local manufacturers would import fabric through back-to-back LCs from competing countries to manufacture the final products. "As a result, local investment in the PTS would face a threat and workers would lose their jobs," he said.The BTMA chief said until now, investment in the PTS was made following the existing two-stage transformation system in the Rules of Origin (RoO) of the EU. If the single transformation is introduced after 2010, the sector would not see any new investment, he said.