The Canadian parliament has recently passed a finance bill that extends duty-free access to its market for Bangladesh until 2034.
This decision, which comes as part of the General Preferential Tariff (GPT) scheme, has garnered praise for its potential to propel Bangladesh’s industrial transformation and strengthen its bilateral trade relations.
The GPT scheme, introduced in the Canadian parliament in June, ensures that Bangladesh continues enjoying favourable trade terms, promoting economic growth and mutual cooperation.
As per this scheme, Bangladesh will maintain duty-free access to Canada’s market and be entitled to relaxed rules of origin for its apparel items. This strategic move is expected to foster further growth in Bangladesh’s Ready-Made Garments (RMG) sector, a significant contributor to the country’s economy.
The extension of duty-free market access to Bangladesh is especially relevant as the nation is poised to graduate from its Least Developed Country (LDC) status in 2026. The Canadian government’s foresight in extending these privileges beyond LDC status highlights its commitment to supporting the growth of developing economies.
This decision is rooted in a broader plan that links market access benefits to labour and environmental compliance within industries, signalling a proactive approach towards sustainable trade practices.
The positive reception of this development is obvious within the Bangladeshi business community. Faruque Hassan, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), emphasized the profound implications of the Canadian parliament’s decision.
He underlined that this policy extension aligns with Bangladesh’s aspirations for a safer, cleaner, and more sustainable workplace. It will accelerate the country’s infrastructure development, which is critical to sustained economic progress.
The trade statistics further underscore the significance of this decision. Data from the Export Promotion Bureau (EPB) reveals that Canada ranked as Bangladesh’s 11th largest exporting partner, with exports totalling $1.72 billion in FY23.
Notably, the Canadian market is a key destination for Bangladeshi apparel, with RMG exports reaching $1.55 billion in FY23—a remarkable 16.55% growth compared to the previous fiscal year. With the extension of the GPT scheme, there is a renewed sense of opportunity to penetrate this market further and amplify the growth trajectory.
Faruque Hassan expressed optimism about the potential for even more robust trade relations between Bangladesh and Canada. He pointed out that the existing GPT scheme, which facilitated complete duty-free and quota-free access since 2003, is due for renewal every decade, and the current version will expire by the end of 2024.
Shasha Denim’s Managing Director, Shams Mahmud, commended the Canadian decision for its positive implications. He observed that while Bangladesh previously adhered to rules of origin requirements as part of the Least-Developed Country Tariff (LDCT) scheme, the introduction of GPT+ eliminates these restrictions. Mahmud’s insights highlight the transformative potential of this decision, as it opens doors for increased value addition and trade expansion.
The strategic alignment of trade policy with social, environmental, and safety criteria is a testament to Bangladesh’s commitment to sustainable practices. Shams Mahmud’s assertion that Bangladesh meets these standards underscores the country’s progress in prioritizing responsible industrial practices.
As Bangladesh looks towards the future, the extended duty-free access to the Canadian market is set to catalyze industry growth, economic diversification, and strengthened bilateral relations.
The commitment to sustainable trade practices is a step in the right direction, aligning with global goals for responsible and inclusive economic development.
