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Government urged to avoid SAARC cumulating rules |
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August 13, 2000
Dhaka (UNB) – Textile entrepreneurs yesterday demanded of the government to avoid SAARC cumulating rules within the capacity of government itself for protecting the country’s growing textile sector. “It’s clear those in favour of SAARC Cumulation are having short term interests sacrificing long term benefits and gains to nation,” Bangladesh Textile Mills Association (BTMA) chairman Salman F Rahman told a press conference at the National Press Club. He said the rules could easily be avoided by restricting the issuance of the certificate of origin, essential instrument for enjoying GSP facilities, from the Export Promotion Bureau (EPB). The RMG exporters have to use a certain portion of local raw materials to enjoy GSP facilities, given by EU to weaker partners to develop their industry by allowing market access and waiver or reduction of duties. Salman said India and Pakistan, tried for the rules for last many years, would reap huge benefit from the regional cumulating of GSP facilities. SAARC Cumulating will allow Indian and Pakistani fabrics and yarn to be exported to EU on duty and quota free basis via Bangladesh by utilising Bangladesh’s GSP facilities, he said. Presently Indian and Pakistani fabric and yarn exports to EU attract duty and are limited by quota. European Union notified the SAARC Cumulating rules in its gazette on July 26, which is expected to be effective from October after necessary procedures, officials of European Commission in Dhaka said. “The government’s consent to the SAARC Cumulation Rules was very much surprising…opinions of the local businessmen concerned were not taken at all,” said the BTMA chairman. About growth of textile industry, he said till now an investment of Tk 8,000 crore has been made in the backward linkage industries of the textile sector and further Tk 5,000 crore is expected to be invested by 2005. “All the investments were indigenous.” BTMA members and new mills have planed to produce all the yarn and most of the fabric required for commonly exported RMG by 2005, he said. Salman said BTMA mills are meeting 80 per cent of the Knit RMG export requirement with a capacity to produce 200 million Kgs export quality yarn and 20 per cent of the woven fabric requirement. Since 1995, BTMA mills have installed and set up air conditioned mills having 1,200,000 spindles with 325 autoconers, auto leveller draw frames, large number of shuttle-less looms with modern dying, printing and finishing facilities. Salman said maintaining the current export level of US$4 billion, and assuming that 75 percent of this is supplied by local yarn and fabric, the foreign exchange retention would be US$2.29 billion as against one billion dollar under SAARC cumulating rules. He said the country will have to export RMG worth US$9.16 billion to achieve foreign exchange retention of US$ 2.29 billion under the rules. “It’s therefore clear that we should concentrate on strengthening our backward linkage industries and protect our market, jobs and investment,” he said. He said under SAARC Cumulation US$ 1.48 billion export is required to achieve foreign exchange retention of US$370 million, which was retained by BTMA’s export of US$540 million in 1999-2000. This can only happen if Bangladesh is able to take away EU market share from intra-EU market and close proximity non-quota countries, non-quota countries other than Bangladesh and quota countries mainly China, Hong Kong and Indonesia, he added. So, it’s very difficult to achieve the required incremental sales of US$1.48 billion, he said. “The only achievement of SAARC cumulation will be to replace Bangladeshi Yarn and Fabric with Indian and Pakistani ones,” said the BTMA chairman. BTMA vice-chairman Abul Quasem Haider and executive committee member MA Matin were present at the press conference. |