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New trading scheme: UK to closely monitor Bangladesh rights issues, says UK minister
05 July, 2023, 11:20 pm
Last modified: 05 July, 2023, 11:46 pm
TBS sketch
TBS sketch
Bangladesh is anticipated to be one of the largest beneficiaries of the Developing Countries Trading Scheme (DCTS) that the UK launched recently to facilitate 65 developing countries offering reduced tariffs and in many cases zero tariffs. However, the scheme will come with some major conditions, particularly, ensuring labour rights, human rights, civil rights, and running free, fair, inclusive elections said UK Minister for International Trade Nigel Huddleston MP in an exclusive interview with The Business Standard Special Correspondent Jebun Nesa Alo during his first visit to Dhaka on 5 July.
The bilateral trade between Bangladesh and the UK already reached a record $4.7 billion in 2022. Meanwhile, the UK launched DCTS. How will DCTS impact bilateral trade?
You are right. This is really a large amount. But, we feel that we could do so much more. And that is broken down very much on exports from Bangladesh to the UK and a smaller amount from the UK to Bangladesh. So, it is uneven at the moment. But, we think we can grow the pie for both sides and grow international trade for both sides in both goods and services.
So we are very optimistic about the growth prospects. We really value the relationship we have got with Bangladesh. And, of course, we have got very strong historic and cultural ties. There is a very large Bangladeshi heritage population in the UK as well. So there is a real emotional link already. And, I think that speaks well to the potential for growth of even more trade.
The Developing Countries Trading Scheme (DCTS) is a really important scheme. It applies to 65 countries around the world. But one of the largest beneficiaries of the scheme we anticipate is Bangladesh. One of the key benefits is we are reducing tariffs, in many cases right down to zero. What that means is businesses exporting to the UK from developing countries can really benefit from that. There will be lower prices. That is also good for British consumers because there is more choice. But the key thing is tariffs. We are trying to make life easier in terms of exporting, so changing some of the rules.
We really hope that Bangladesh will benefit. That means that businesses who are already exporting to the UK might be able to do so cheaper, but also there is an added incentive now for even more businesses to export.
The UK is optimistic about the potential of this scheme and views it as a valuable and generous programme, surpassing the previous scheme that was operated under the European Union. The UK also appreciates the control and flexibility it has over this scheme, recognising its significance and the benefits it can bring.
The DCTS has some conditions including meeting a certain standard of human rights and civil and political rights. In this light, how would you evaluate Bangladesh?
First and foremost, the scheme is there to encourage trade and we want to really encourage bilateral trade because we really see mutual benefits. So, it is there to really help create jobs and opportunities for developing countries, including Bangladesh. But it does come with some conditions about requirements in particular to fill some already existing international obligations, including such things as labour rights, human rights, civil rights, and running free, fair, inclusive elections. So, those are some of the underpinnings of the scheme and we will be monitoring very closely. Yes, we will be monitoring Bangladesh.
The same rules apply to all the countries that will be beneficiaries of the scheme as well, so it is not unusual when there are these kinds of schemes to have certain conditions.
The key thing is making sure that we have got the maintenance of those civil rights, human rights, and other international agreements. So we are not singling out any individual country here. These apply to all the beneficiaries of the schemes.
Bangladesh's export to the UK is still mostly RMG. What other sectors can Bangladesh nurture for the UK market?
Obviously, the readymade garments sector is really important. It plays to Bangladesh's strengths, but we would like to see more diversification in other areas as well, and that would be good for Bangladesh. The DCTS can apply across multiple sectors. So there is a real incentive to build export opportunities across other sectors. But we would like to work with Bangladesh to find other areas where they can expand their trade into.
There are several sectors that we are particularly excited about. As mentioned earlier, both goods and services play a crucial role. The service sector, in particular, holds great importance. We are keen on expanding sectors such as financial services, insurance, and education. Higher education, in particular, is an area of great interest to us. British universities, for instance, have already established a presence in Bangladesh, providing a valuable opportunity for both countries. We can establish a footprint in Bangladesh with a well-established high reputation and very high-quality education and also make it cheaper for many Bangladeshis to get access to that good qualifications and that good education without having to travel to the UK. This model of higher education has been successfully implemented in developing countries worldwide, and we aim to see more of it here in Bangladesh. Currently, the London School of Economics (LSE) has a presence in Bangladesh, and numerous other universities are enthusiastic about expanding their operations as well. Additionally, sectors like aviation also hold potential for growth. And again, it's all about mutual benefit, it's about making sure that both countries can benefit from these kinds of efforts.
The UK secured the top position in terms of FDI source for Bangladesh in the last year. Do you think this trend will continue in the coming years?
Certainly, I hope so. One thing that I found out in my brief visit here, talking to a lot of businesses that are investing here, is that there are amazing opportunities and great confidence in the future of Bangladesh. There's already been really very, very good economic growth over the last few years and it is expected that it will continue. But, they also pointed out some challenges which sometimes make doing business difficult here. And, when a country is known for being a little bit difficult for doing business in, then that can inhibit investment opportunities. So, I think in order to make sure that the investment continues at large volumes, Bangladesh needs to continue to evolve. It needs to continue to open up financial services and many other sectors and make sure that it continues to be a very attractive place for investment. This means providing greater confidence and stability and assurance in areas such as tax so that companies know that they can do their planning for the long term.
The basics are really solid for Bangladesh but at the same time, it can't take anything for granted already. Actually, there are some challenges in terms of doing business, but there are things that the government and others can do to make sure that it continues to be attractive and enhance attractiveness as well. This is because when it comes to FDI, the global marketplace is very competitive and the money basically flows where there's a good ROI (return on investment) and there's good potential, and also where it's easy to do business. So, to focus on those things is really important.
The Ukraine war has heavily affected the economic stability of Bangladesh. Besides, there is growing political tension in the country this year. How do you see Bangladesh coming out of this situation smoothly?
Every region in the world has been impacted by the Russian invasion of Ukraine. It has had an impact on energy prices. It has had an impact on supply chains. Bangladesh also has been impacted.
And, in order to overcome the challenges of the invasion of Ukraine, Bangladesh needs to focus on making sure it continues to be an attractive place for investment. That means stability and confidence in institutions, confidence in the banking system, and confidence across the board is very much there and then that will lead to continued or even greater investment.
Bangladesh signed a major aviation deal with the UK. We would like to know a bit of detail about this deal; how it will be financed and how the UK could help develop Bangladesh's aviation sector.
We see a huge opportunity for the aviation sector in Bangladesh that goes to the expansion of airports and in the development of airlines. Increasing the number of planes and diversifying suppliers can be beneficial for this expansion.
The United Kingdom possesses significant expertise in various areas such as baggage handling and air traffic control, which can contribute to the growth of the aviation industry in Bangladesh. We are committed to establishing a partnership with Bangladesh, not only in terms of providing technical expertise but also extending assistance in areas like financing.
One way we can assist is through a financial instrument called UK Export Finance, which can provide support for aviation projects. With our expertise and financing capabilities, we are well-equipped to contribute significantly to the expansion of the aviation sector in Bangladesh.
www.tbsnews.net
ECONOMY
TBS Report05 July, 2023, 11:20 pm
Last modified: 05 July, 2023, 11:46 pm
TBS sketch
TBS sketch
Bangladesh is anticipated to be one of the largest beneficiaries of the Developing Countries Trading Scheme (DCTS) that the UK launched recently to facilitate 65 developing countries offering reduced tariffs and in many cases zero tariffs. However, the scheme will come with some major conditions, particularly, ensuring labour rights, human rights, civil rights, and running free, fair, inclusive elections said UK Minister for International Trade Nigel Huddleston MP in an exclusive interview with The Business Standard Special Correspondent Jebun Nesa Alo during his first visit to Dhaka on 5 July.
The bilateral trade between Bangladesh and the UK already reached a record $4.7 billion in 2022. Meanwhile, the UK launched DCTS. How will DCTS impact bilateral trade?
You are right. This is really a large amount. But, we feel that we could do so much more. And that is broken down very much on exports from Bangladesh to the UK and a smaller amount from the UK to Bangladesh. So, it is uneven at the moment. But, we think we can grow the pie for both sides and grow international trade for both sides in both goods and services.
So we are very optimistic about the growth prospects. We really value the relationship we have got with Bangladesh. And, of course, we have got very strong historic and cultural ties. There is a very large Bangladeshi heritage population in the UK as well. So there is a real emotional link already. And, I think that speaks well to the potential for growth of even more trade.
The Developing Countries Trading Scheme (DCTS) is a really important scheme. It applies to 65 countries around the world. But one of the largest beneficiaries of the scheme we anticipate is Bangladesh. One of the key benefits is we are reducing tariffs, in many cases right down to zero. What that means is businesses exporting to the UK from developing countries can really benefit from that. There will be lower prices. That is also good for British consumers because there is more choice. But the key thing is tariffs. We are trying to make life easier in terms of exporting, so changing some of the rules.
We really hope that Bangladesh will benefit. That means that businesses who are already exporting to the UK might be able to do so cheaper, but also there is an added incentive now for even more businesses to export.
The UK is optimistic about the potential of this scheme and views it as a valuable and generous programme, surpassing the previous scheme that was operated under the European Union. The UK also appreciates the control and flexibility it has over this scheme, recognising its significance and the benefits it can bring.
The DCTS has some conditions including meeting a certain standard of human rights and civil and political rights. In this light, how would you evaluate Bangladesh?
First and foremost, the scheme is there to encourage trade and we want to really encourage bilateral trade because we really see mutual benefits. So, it is there to really help create jobs and opportunities for developing countries, including Bangladesh. But it does come with some conditions about requirements in particular to fill some already existing international obligations, including such things as labour rights, human rights, civil rights, and running free, fair, inclusive elections. So, those are some of the underpinnings of the scheme and we will be monitoring very closely. Yes, we will be monitoring Bangladesh.
The same rules apply to all the countries that will be beneficiaries of the scheme as well, so it is not unusual when there are these kinds of schemes to have certain conditions.
The key thing is making sure that we have got the maintenance of those civil rights, human rights, and other international agreements. So we are not singling out any individual country here. These apply to all the beneficiaries of the schemes.
Bangladesh's export to the UK is still mostly RMG. What other sectors can Bangladesh nurture for the UK market?
Obviously, the readymade garments sector is really important. It plays to Bangladesh's strengths, but we would like to see more diversification in other areas as well, and that would be good for Bangladesh. The DCTS can apply across multiple sectors. So there is a real incentive to build export opportunities across other sectors. But we would like to work with Bangladesh to find other areas where they can expand their trade into.
There are several sectors that we are particularly excited about. As mentioned earlier, both goods and services play a crucial role. The service sector, in particular, holds great importance. We are keen on expanding sectors such as financial services, insurance, and education. Higher education, in particular, is an area of great interest to us. British universities, for instance, have already established a presence in Bangladesh, providing a valuable opportunity for both countries. We can establish a footprint in Bangladesh with a well-established high reputation and very high-quality education and also make it cheaper for many Bangladeshis to get access to that good qualifications and that good education without having to travel to the UK. This model of higher education has been successfully implemented in developing countries worldwide, and we aim to see more of it here in Bangladesh. Currently, the London School of Economics (LSE) has a presence in Bangladesh, and numerous other universities are enthusiastic about expanding their operations as well. Additionally, sectors like aviation also hold potential for growth. And again, it's all about mutual benefit, it's about making sure that both countries can benefit from these kinds of efforts.
The UK secured the top position in terms of FDI source for Bangladesh in the last year. Do you think this trend will continue in the coming years?
Certainly, I hope so. One thing that I found out in my brief visit here, talking to a lot of businesses that are investing here, is that there are amazing opportunities and great confidence in the future of Bangladesh. There's already been really very, very good economic growth over the last few years and it is expected that it will continue. But, they also pointed out some challenges which sometimes make doing business difficult here. And, when a country is known for being a little bit difficult for doing business in, then that can inhibit investment opportunities. So, I think in order to make sure that the investment continues at large volumes, Bangladesh needs to continue to evolve. It needs to continue to open up financial services and many other sectors and make sure that it continues to be a very attractive place for investment. This means providing greater confidence and stability and assurance in areas such as tax so that companies know that they can do their planning for the long term.
The basics are really solid for Bangladesh but at the same time, it can't take anything for granted already. Actually, there are some challenges in terms of doing business, but there are things that the government and others can do to make sure that it continues to be attractive and enhance attractiveness as well. This is because when it comes to FDI, the global marketplace is very competitive and the money basically flows where there's a good ROI (return on investment) and there's good potential, and also where it's easy to do business. So, to focus on those things is really important.
The Ukraine war has heavily affected the economic stability of Bangladesh. Besides, there is growing political tension in the country this year. How do you see Bangladesh coming out of this situation smoothly?
Every region in the world has been impacted by the Russian invasion of Ukraine. It has had an impact on energy prices. It has had an impact on supply chains. Bangladesh also has been impacted.
And, in order to overcome the challenges of the invasion of Ukraine, Bangladesh needs to focus on making sure it continues to be an attractive place for investment. That means stability and confidence in institutions, confidence in the banking system, and confidence across the board is very much there and then that will lead to continued or even greater investment.
Bangladesh signed a major aviation deal with the UK. We would like to know a bit of detail about this deal; how it will be financed and how the UK could help develop Bangladesh's aviation sector.
We see a huge opportunity for the aviation sector in Bangladesh that goes to the expansion of airports and in the development of airlines. Increasing the number of planes and diversifying suppliers can be beneficial for this expansion.
The United Kingdom possesses significant expertise in various areas such as baggage handling and air traffic control, which can contribute to the growth of the aviation industry in Bangladesh. We are committed to establishing a partnership with Bangladesh, not only in terms of providing technical expertise but also extending assistance in areas like financing.
One way we can assist is through a financial instrument called UK Export Finance, which can provide support for aviation projects. With our expertise and financing capabilities, we are well-equipped to contribute significantly to the expansion of the aviation sector in Bangladesh.
New trading scheme: Will closely monitor Bangladesh rights issues, says British minister
Bangladesh is anticipated to be one of the largest beneficiaries of the Developing Countries Trading Scheme (DCTS) that the UK launched recently to facilitate 65 developing countries offering reduced tariffs and in many cases zero tariffs.
