Bangladesh
As a least-developed country (LDC), Bangladesh is a beneficiary of the EU's "Everything but Arms" (EBA) arrangement. Since March 2017, Bangladesh is one of the countries under "enhanced engagement", which further incentivises and facilitates beneficiary countries' progress with regard to the 15 core international conventions covered in the GSP Regulation. 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.
At a glance: EU preferential imports from EBA beneficiary countries (2023, € million)
171.5M (2023)
Population
Parliamentary Republic
Government
5.8% (2023)
GDP Growth
9.9% (2023)
Inflation
$ 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 GSP
Economic Impact
100%
Almost all exports of Bangladesh to the EU market were eligible for EBA tariff preferences in 2023.
91%
Bangladesh's preference utilisation rate in 2023.
91%
Share of zero-duty imports from Bangladesh.
Preference utilisation and export diversification
EU imports from Bangladesh (€ million)
Preference utilisation (%) vs. total eligible imports (in € million)
Most of Bangladesh's exports to the EU are eligible for preferences under the EBA. EBA-eligible imports from Bangladesh strongly increased until 2019 but then dropped sharply during COVID-19. They rebounded in 2022, reaching an all-time high, but decreased substantially in 2023. Bangladesh's preference utilisation rate, which indicates the ratio of eligible to preferential imports, was consistently above 95% until 2022 but dropped to (a still high) level of 90% in 2023, driven by the corresponding drop in the most important export by far, apparel. But for most other product sections the preference utilisation rate also slightly declined in 2023.
The largest product sections under EBA (€ million, 2023)
EU imports from Bangladesh remain heavily concentrated on garments, which accounted for 94% of all preferential imports in 2023. However, in the past three years, imports of headgear increased fastest among the leading categories - they were almost 70% higher in 2023 than in 2021; conversely, imports of vehicles decreased by 7% in the same period. The government makes an effort to further diversify the economy and has identified a number of priority sectors. The EBA preference utilisation rate decreased, however, and in 2023, nine product categories had a utilisation rate of over 90% - down from 17 categories in 2022.
SUSTAINABLE DEVELOPMENT
Under the GSP rules, trade preferences 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. With the ratification of ILO Convention No. 138 (Minimum Age Convention) in 2022 Bangladesh has now ratified all of the 27 conventions listed in the GSP Regulation. Nevertheless, the EU "enhanced engagement" with Bangladesh continues since 2017 due to concerns with the country's overall adherence to human and labour rights. The enhanced engagement process over the last few years has allowed for constructive bilateral exchanges on labour rights. Limited progress was recorded for human rights. The key concerns on labour rights were the following: legal obstacles to the right to establish and operate trade unions, anti-union discrimination, shortcomings related to labour inspection, gaps in implementing occupational health and safety, and persistence of child and forced labour. On human rights: deficiencies regarding freedom of expression, freedom of assembly and association and civil society space, as well as cases of alleged torture, ill-treatment, extra-prejudicial killings, and enforced disappearances. With regard to labour rights, the engagement builds on the National Action Plan on the Labour Sector of Bangladesh (NAP 2021-2026). Since August 2024, the new Interim Government led by Chief Adviser Professor Muhammad Yunus has opened new opportunities for substantive reforms in the country, including in the human and labour rights area.
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 Minimum Age for Admission to Employment, No 138 (1973)
- Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)
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 Cooperation
DG INTPA
Access all info about EU-Bangladesh relations on the International Partnerships website.