“In a report published this morning, Asia Tmes Online said: “A
relaxed tariff structure for knitted goods entering the 27-member European
Union from Bangladesh begins from January 1, while zero tariffs for knitted
exports are likely to be introduced by Japan next year. The combined impact
could lead to a US$4.8 billion increase in exports by 2013.””
“p style=”text-align: left;”>”“The knitwear industry, led by companies such as Interstoff,
Fakir Apparels and Viyellatex Group, employs more than 1.5 million people in
Bangladesh and contributes just over 40% of the country’s exports,” the report said .
“p style=”text-align: left;”>”According to the report, if imported yarn is used to
manufacture knitted goods to be exported to Japan, a tariff of between 8% and
11% is levied on the product. “This arrangement is likely to change from this
year, as the Japanese government is considering promoting Bangladesh from the
existing three-stage structure to a two-stage structure that would mean
Bangladeshi knitwear exports would get duty-free access to Japan under the
Generalized System of Preferences (GSP) – a system of exemptions from general
World Trade Organization rules,” the report said .
“p style=”text-align: left;”>”“The change will mean Bangladeshi factories will be able to
produce better-quality knit products, using yarn and man-made fiber imported
from India, China, Taiwan and other countries and sell it to the Japanese market
duty-free,” Asia Times reported .
“p style=”text-align: left;”>”While the knitwear exporters had discussed such
situations earlier with some of the Japanese organizations, headway in the
talks was made during the visit to Japan by [Bangladeshi] Prime Minister Sheikh
Hasina in November, when she met her Japanese counterpart and discussed the
issue,” Takashi Suzuki, representative in Dhaka of the Japan External
Trade Organization (JETRO), is said to have told Asia Times Online last week .
“p style=”text-align: left;”>”Today’s report said Suzuki was ‘highly optimistic’ that the
relaxation in Rules of Origin for Bangladeshi knitwear products may come into
effect this year, although “as the fiscal year in Japan is from
March-April, there is a chance that the topic will be raised in the parliament
before April. However, chances are high that the decision could be in favor of
the LDCs as there has been no change in these rules over the past decade,”
Suzuki is reported to have said .
“p style=”text-align: left;”>”The report also states that Suzuki said the change will
definitely make Bangladeshi knit products more competitive in the Japanese
market, while also giving the Bangladeshi knitwear industry the opportunity to
export advanced knitted products, as more sophisticated yarn and man-made fibre
could then be used to manufacture and export items such as overcoats, hats,
lingerie and socks without the tariff burden .
“p style=”text-align: left;”>”Knit products exported to Japan to date have been
mostly very basic like sweaters, T-shirts, polo shirts, ladies garments and so
on. However, if and when the new structure becomes effective, higher ended
products can also be exported,” Suzuki told Asia Times .
“p style=”text-align: left;”>”The report goes on to say that Japanese importers may also
start looking to Bangladesh for goods like socks, underwear and similar items,
whose manufacture requires some imported raw materials, leading until now to
the imposition of Japanese tariffs. Habibur Rahman, vice-president of the 1,650
member Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), who
with other businessmen accompanied the prime minister to Japan, told Asia Times
Online that association members were are already receiving responses from
Japanese importers .
“p style=”text-align: left;”>”Some of the biggest Japanese importers of socks and
undergarments are already talking to us about the most viable options of
importing from Bangladesh including setting up industries locally. Earlier,
these importers were dependent mostly on China,” Rahman is reported to
have said .
“p style=”text-align: left;”>”The report continues to talk about how Japan’s China 1
business policy is helping Bangladesh, export potential to Japan and the potential
export growth arising from changes in the EU’s tariff structure for knit
products .