Brexit fear puts brakes on BD exports to UK
Uncertainty over Brexit and fear of no-deal at the end have slowed down the growth of Bangladesh's export to the United Kingdom (UK) -- the third largest export destination for the country causing worries on both sides.
Export Promotion Bureau (EPB) trade statistics said in the fiscal 2018-19, Bangladesh's export earnings from the UK posted a 4.51 percent growth to $4.16 billion against an 11.76 percent growth to $3.99 billion in the previous fiscal 2017-18.
It is not clear how the situation will emerge this year when Britain is going for crucial decision but many believe until a clear picture emerges with or without Brexit, the uncertainty may continue to slowdown export.
The apparel sector, by far the largest contributor to Bangladesh's exports basket fetched $3.85 billion in FY 18, which is 92.56 percent of total exports of $4.16 billion. So the growth of Bangladesh's exports to the UK fell lower than countries of other export destinations.
The country overall exports have registered a 10.55 percent growth to $40.53 billion in FY19 in which Bangladesh's exports to the US rose by 14.92 percent or $893 million to a total of $6.88 billion. This was $5.98 billion in the previous FY18
Apparel goods earned $6.13 billion posting a 14.60 percent growth last year over the previous years' earnings. Export to Germany, the second largest destination after UK earned $6.17 billion, up by 4.79 percent which was $5.90 billion in the FY18.
Germany imported 15.23 percent of Bangladesh's total exports. EPB disclosure said Bangladesh's export is steadily growing to major export markets like the USA and EU countries except a slowdown in growth to the UK market.
Many buyers in Europe would also collect merchandise, mainly garments from London based importers besides direct import because of easy connectivity and closer relation of buying houses with producers in Bangladesh.
Now both sides are feeling shaky as to how the Brexit is going to end. Uncertainty about it made it increasingly difficult for many UK based importers to figure out how the market would behave in post Brexit situation, what would be tariff rate after the Brexit with Bangladesh and with other European countries if Britain comes out of European single market.
"Over the uncertainty, a good number of big companies including Primark shifted office from London to Dublin. This uncertainty is there to a great extent among the business people," said Rubana Haq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
She said Bangladesh's export growth witnessed a slowdown in the last fiscal as UK's internal shocks still looming hitting hard its own economy. She however said Bangladesh will keep on enjoying zero tariff trade facilities under Everything but Arms (EBA) clause with EU countries. There will be no change after the Brexit deal, she said.