Bangladesh to benefit as EUrelaxes rules of origin

DHAKA (Reuters) - Bangladesh will benefit from the European Unions relaxation of its rules on the origin of imported goods, due to take effect from January 1, a business leader said on Saturday. A news release issued by the EUs Dhaka office said the changes would allow duty-free access for many more items assembled in Bangladesh from imported components. New opportunities will be opened up for Bangladeshi products to the EU markets, said Mohammad Shafiul Islam Mohiuddin, vice president of the Bangladesh Garment Manufacturers and Exporters Association. The regulation relaxes and simplifies the rules and procedures for developing countries such as Bangladesh. The new rules will enhance market access for Bangladeshs ready-made garments, and will raise our bargaining capacity, Mohiuddin, who is also the managing director of garment exporter Onus Group, told Reuters. Bangladeshs exporters have been really looking forward to this change, said Andrew Barnard, head of the political, trade and information section of the EU delegation in Dhaka. The new rules suggest that clothes made in Bangladesh will have duty-free access to the EU market even if they are made of imported textiles. The threshold of value addition for industrial products will be reduced to 30 percent from a previous 70 percent so that even with up to 70 percent of foreign input, a product could still be viewed as originating in Bangladesh, the EU release said. The new rules of origin will help diversify our products and we can enhance our negotiation capacity, Mohiuddin said. Bangladesh exported more than $16 billion worth of products in the fiscal year to end-June 2010 and ready made garments account for more than 80 percent of total export earnings with 60 percent of overseas sales made in EU markets.

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