Bangladesh

As a least-developed country (LDC), Bangladesh is a beneficiary of the EU's "Everything but Arms" (EBA) arrangement. The World Bank considers Bangladesh a lower middle-income economy with a per-capita income of $2,551 in 2023. Since March 2017, Bangladesh is part of the European Commission's "enhanced engagement", which further incentivises and facilitates beneficiary countries' progress with regard to the 15 core international conventions covered in the GSP Regulation. The enhanced engagement includes inter alia a close dialogue between public officials and monitoring missions by the European Commission. Preferential exports to the EU are important for Bangladesh: in 2023, they amounted to €17.1 billion, making Bangladesh the largest exporter among EBA beneficiary countries by far.

What is the EBA?

The EBA arrangement covers all LDCs as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products originating in LDCs except for arms and ammunition. Unlike beneficiaries of the Standard GSP and GSP+, LDCs are not excluded from the scheme if they benefit from other preferential arrangements or agreements with the EU.

Bangladesh flag

At a glance: EU preferential imports from EBA beneficiary countries (2023, € million)

group

171.5M (2023)

Population

account_balance
Parliamentary Republic

Government

trending_up

5.8% (2023)

GDP Growth

equalizer

9.9% (2023)

Inflation

money

$ 437.4B (2023)

GDP

Facts about Bangladesh's economy

Garment Industry

The garment industry is by far the most important industry for Bangladesh, and it contributes about 80% to the country's total export earnings. This makes Bangladesh the world's second largest exporter of garments. From 2019 to 2023, garments exports grew by around 10% per year to almost €46 billion.

Export Products

Apparel and clothing articles, footwear and other textile articles dominate Bangladesh's export sector. These products are followed by fish products, articles made of leather, headgear and hides and skins.

Trade Partners

Next to the EU, China, India, and the US are important trading partners for Bangladesh. China and India are the most important sources of imports, accounting for a combined share of 41% in 2023. The EU accounts for over 45% of the exports followed by the US and the UK.

Economic Structure

Although the agricultural sector only contributes about 12% to the GDP, it employs the majority of the workforce. Rice remains the most important agricultural product, together with jute and tea. Economic growth was mainly driven by the industrial sector (33.32 %), of which the clothing and garment industry is the most important pillar. Other manufacturing activities include the production of fertilizer, paper, sugar, glass, and aluminium works. Services contribute 51.3% to the GDP rendering it the most important economic sector of Bangladesh.

Usage of EBA Preferences

Bangladesh is by far the most important beneficiary of the EBA arrangement. In 2023, about 90% of Bangladesh's total exports made use of the preferences granted under the EBA.

Trade with the EU

Total trade with the EU amounted to €20.7 billion in 2023. With a share of 20.7%, the EU is Bangladesh's most important trading partner and is particularly important as a market for Bangladesh: in 2023, 45.6% of Bangladesh's exports went to the EU market.

Bangladesh and the EU

Imports from Bangladesh by product section (2023, € million)

Imports from Bangladesh over time (€ million)

BANGLADESH AND THE EU’s GSP

Economic Impact

Bangladesh is the third largest economy in Southeast Asia, after India and Pakistan. In the last ten years, Bangladesh's economy recorded respectable growth rates, which is particularly significant given the high dependency on exports and the resulting vulnerability to fluctuations on international markets. Between 2020-2022, EU imports from Bangladesh have increased by almost 80%. Considering that about 95% of overall imports are eligible for duty suspensions under the EBA scheme, it has directly contributed to Bangladesh's economic growth and development. Bangladesh is scheduled to graduate from LDC status in 2026.

100%

Almost the entire exports of Bangladesh to the European market are eligible for duty suspensions granted by the EBA.

95.10%

Bangladesh makes use of the duty suspension under the EBA arrangement for about 95% of its eligible EU exports.

Preference utilisation and export diversification

Bangladesh's imports to the EU

Preference Utilisation vs. total eligible imports

Bangladesh's preference utilisation rate, which indicates the ratio of eligible to preferential imports, has been consistently high over the past years with an average of over 95%. Likewise, eligible imports increased constantly over time. Looking at individual product sections, Bangladesh makes good use of the duty suspensions granted under the EBA scheme for its dominant import groups like apparel, footwear, and fish products. Product sections which could make better use of the preferential market access include textiles, instruments, and chemicals.

The largest product sections under EBA

EU imports from Bangladesh remain heavily concentrated on apparel, clothing and textile imports, which account for almost 93% of all preferential imports under GSP. The value of imports of tobacco in 2022 is over 3 times bigger than in 2020, and all imports are eligible for preferential rates, of which the country makes use almost 100%. In 2022 this product category climbed in the ranking and is now among the top 5. The government makes an effort to further diversify the economy and has identified a number of priority sectors. In 2022, 16 product categories experienced a utilisation rate of over 90%.

SUSTAINABLE DEVELOPMENT

The EU has started the "enhanced engagement" with Bangladesh due to concerns with the country's overall adherence to human and labour rights as covered by the 15 core conventions included in the GSP regulation. The unilateral trade preferences under the GSP are conditional on the adherence to and the respect of fundamental human and labour rights as specified in the 15 fundamental conventions included in the GSP regulation. The EU is concerned about a number of human rights related developments in Bangladesh which motivate the uptake of the "enhanced engagement". These developments include shrinking space for civil society actors, freedom of expression, the right to peaceful assembly, extrajudicial killings, enforced disappearances and torture, as well as discrimination and violence against ethnic and religious minorities. The EU and Bangladesh address human rights related issues in the Subgroup on Human Rights and Good Governance, which is part of the EU-Bangladesh Cooperation Agreement. The European Commission has asked the government of Bangladesh to improve the freedom of expression and the space for civil society and to better investigate cases of alleged torture, ill treatment, extra judicial killings, and enforced disappearances. With regards to labour rights, the engagement builds on the "Sustainability Compact", an initiative between the EU, the US, Canada, Bangladesh and the ILO which focusses on strengthening the freedom of association, the right to collective bargaining, and the promotion of responsible business conduct. With the "enhanced engagement" the European Commission expects further progress in aligning domestic policies with the fundamental ILO conventions. More particularly, the engagement focusses on the removal of legal obstacles to the right to establish trade unions, the elimination of anti-union discrimination, the facilitation of the trade union registration process, the strengthening of the labour inspectorate, as well as the elimination of forced and child labour. The government has already stepped up its engagement and adopted amendments to its labour law in order to strengthen the freedom of association and collective bargaining. The situation relating to the registration and functioning of the trade unions as well as the labour inspectorate still remains an area of concern. Additionally, the situation related to child labour remains concerning, despite a number of legal amendments.

Core international conventions on human rights and labour standards

Ratified

  • Convention on the Prevention and Punishment of the Crime of Genocide (1948)
  • International Convention on the Elimination of All Forms of Racial Discrimination (1969)
  • International Covenant on Civil and Political Rights (1976)
  • International Covenant on Economic Social and Cultural Rights (1976)
  • Convention on the Elimination of All Forms of Discrimination Against Women (1981)
  • Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
  • Convention on the Rights of the Child (1990)
  • Convention concerning Forced or Compulsory Labour, No 29 (1930)
  • Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
  • Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
  • Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
  • Convention concerning the Abolition of Forced Labour, No 105 (1957)
  • Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
  • Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Not Ratified

  • Convention concerning Minimum Age for Admission to Employment, No 138 (1973)

Additional Conventions

  • Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
  • Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
  • Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
  • Convention on Biological Diversity (1992)
  • The United Nations Framework Convention on Climate Change (1992)
  • Cartagena Protocol on Biosafety (2000)
  • Stockholm Convention on persistent Organic Pollutants (2001)
  • Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
  • United Nations Single Convention on Narcotic Drugs (1961)
  • United Nations Convention on Psychotropic Substances (1971)
  • United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
  • United Nations Convention against Corruption (2004)

EU-Bangladesh Bilateral Development Assistance

DG INTPA

Access all info about EU-Bangladesh relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/bangladesh_en

Contact points