Bangladesh needs labour reforms to secure post-LDC benefits: EU Ambassador

The European Union (EU) wants to help Bangladesh secure post-LDC benefits, but the country needs to take numerous initiatives such as labour reforms to maintain future preferential trade benefits in European markets after its graduation, EU Ambassador to Bangladesh Michael Miller has said.

Therefore the stakeholders in industries and the government now have a significant amount of work to do, he said during his visit to two knitwear factories and discussion with business leaders in Narayanganj today (13 January). 

The EU envoy said, "We hope to see a comprehensive revision of the country's labour laws in the near future. We also encourage full transparency in this process and with the EU regarding this matter."

Miller expressed the EU's hope for a "smooth transition" as Bangladesh exits Least Developed Country (LDCs) status. He noted that while the new trade arrangement will differ from the current "Everything but Arms" (EBA) scheme, there are still opportunities for market expansion.

Michael Miller yesterday visited the Epyllion Knitwear factory in Narayanganj. After discussions with Epyllion Group officials and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) representatives, he toured various sections of the factory.

Later, he met with BKMEA President Mohammad Hatem and other leaders in Narayanganj's Chashara area before visiting Metro Knitting & Dyeing Mills in Fatullah.

EU significant partner of govt

The ambassador said, "We are focused on deepening the trading and investment relationship between the EU and Bangladesh, as we are a major commercial partner and a leading investor in your country."

He added, "Our agenda in Bangladesh is to support the interim government in ensuring a successful political transition while fostering growth in the commercial and investment relationship."

The ambassador highlighted key concerns: worker safety, efficient production processes, and upholding environmental standards.

"Access to our market is crucial for Bangladesh's future prosperity. It relies on upgrading the garment, textile, and knitwear sectors while respecting environmental and social standards, and strengthening governance."

The ambassador also noted significant EU investments in renewable energy and loans to improve environmental protection and factory safety retrofitting. 

"We are providing EU funding to support increased compliance in Bangladesh's industries," he added.

Despite the strong trade relationship between the EU and Bangladesh, he acknowledged that foreign direct investment remains comparatively low.

"We aim to expand FDI from the European Union, including capital investment and trade in machinery. This country, with its energetic young population, holds tremendous potential for a stronger, deeper, and broader relationship in the future," said Miller.

As an LDC, Bangladesh currently enjoys duty- and quota-free market access to the EU alongside 45 other countries under the "Everything but Arms" (EBA) scheme.

With the country set to graduate from LDC status in 2026, discussions are ongoing regarding the continuation of preferential trade benefits (GSP) in European markets.

The EU remains Bangladesh's largest trading partner, accounting for 20.70% of its total trade in 2023. That year, Bangladesh exported $18.9 billion worth of goods to European markets, primarily from the garment sector, while imports from the EU stood at $3 billion.