Tuesday | 20 May 2025 | Reg No- 06
Bangla
   
Bangla | Tuesday | 20 May 2025 | Epaper

EU textile policy's impact on our clothing industry

Published : Monday, 21 October, 2024 at 12:00 AM  Count : 1085
Ferdaus Ara Begum
Circle Economy Foundation(CEF)has prepared a study on socio-economic impacts of EU circular textile policies on trading partners. The report discussed about the upstream impacts of EU circular economy policies in Bangladesh while it also analyzed the downstream impacts of EU circular economy in Ghana- a west African country.

The report considers the EU Waste Framework Directive (WFD), the Waste Shipment Regulation(WSR), the Eco design for Sustainable Product Regulation(ESPR), and Corporate Sustainability Due Diligence Directives(CSDDD) in particular. EU imports of RMG from any countries will follow the guidelines of the policies. The report analyzed the impact of these policies in different socio- economic aspects of the country. Bangladesh entrepreneurs and policy makers firstly need to have clear ideas about these policies and how to capture these and reflect in their activities for which it needs enough knowledge, information and time also.

The report, prepared by CEF in its recommendations section, stressed the need for support for broadening the awareness of due diligence and best practices for compliance mechanisms, as well as technical support for businesses. At the home front specially the concerned associations need have a details discussion about these policies in great detail.
Five key socio economic issues on social impacts, economic impacts etc have been discussed in the report. The areas covered in the report, competitiveness and transaction costs, labour markets and sectoral transformation, informality and circular economy, work reallocation and skill development, decent work and social equity are to understand the detailed impacts.

The report articulated that the goal to aid policy makers understanding the impacts through a clear and consistent framework, which is very true and an honest desire. How best to deliver the desire into reality is a question, and how best Bangladesh can prepare to face the changed situation needs to be worked out. great. Bangladesh has a huge RMG sector with parallel informal economy, commonly called as Jhut which is a post- consumer waste. It has had impact on employment, livelihood and in different aspect of the economy. For utilizing the benefits of the formalization needs several preparation. In Bangladesh so far, we do not have any Circular Economy Policy, government support for recycler is not clear. We came to know that in India there is recycle plants by the government, while in Bangladesh there is huge amount of tax( about 22% including VAT) is imposed on Jhut, working as one of the causes to be informal from the beginning

The report has given a definition of informality and decent work. A definition of informality is included in the Industrial Policy 2022 of Bangladesh( chapter 3, point 3.2.17) and to what extent it can be revisited to be aligned with EU needs to be discussed clearly. In that respect Bangladesh also could look into the examples of other countries.

Development of automation and digitalization are already significantly reshaping production and manufacturing in Bangladesh, this is true in case of large brands, however the situation of SMEs and sub-contracting firms are different. When referring to this, that indeed smaller companies are less concerned, which in fact places them in an even more vulnerable position in terms of competitiveness.

The research questions pertains to, 1: Potential effects of declining RMG exports and income levels,2: Transition to circularity and skill demand, and labour market dynamics,3: Policies to mitigate job losses in the textile sector, 4: New tariff, product design, traceability rules how will affect competitiveness. Textile and clothing sector is one of the proud for Bangladesh. Besides RMG, there are home textile, terry towel, denim etc which are doing good, all together to understand everything it is a great picture. The sector will need huge investment and revisiting policy architecture and supportive technical assistance in that respect. A parallel study from Bangladesh could give a better result and detailed impact can then be made visible clearly.

The report in chapter 3 started with some hypothetical impact on earlier study on Impact of EU Textile Policy and based on that how to accommodate EU Circular economy policies within the sector. Findings revealed that initially slow growth followed by steady expansion, there could have been alternative scenarios also. In view of that detailed preparation for accommodating circular policy is a must for the country.

Recent situation analyzed in last report can be discussed further with the concerned sectoral players. The risk of wage theft mentioned at one chapter of the report, could also need to be discussed with the concerned stakeholders further.

Labour market and sectoral transformation. The key messages given in the report is very much fact for the country, we are aware about the unemployment rate in the country, uncertainty in this respect will aggravate the socioeconomic impact further. Clear strategies for skill development will need some time and preparation, moreover most of the women worker in the sector are not that much flexible to accommodate new strategies concerning their educational background. It has got two specific dimensions, one is to learn the new way of manufacturing goods on the other hand because of ESPR new jobs in circular sectors can be created within EU at the cost of the manufacturing jobs in Bangladesh due to reduced demand in Bangladesh. This double blow will be very difficult for Bangladesh to entertain.

On the other hand, EU textile strategy is focused on efficiency and technological innovation in promoting sustainable consumption and production may have long term impacts on employment and demand, still highly unpredictable. 2nd hand clothing and repair and refurbishing is in practice in Bangladesh since long, in view of that eco design and enabling environment for circular business can be created in Bangladesh, provided standard and other requirements are fulfilled.

Considering the EU market for Bangladesh as one of the important destination of RMG export, we will have to align our preparation to accommodate new changed policies for which technical assistance projects needs to be initiated and implement those very effectively to improve skill and efficiencies. Also, policies needs to be framed taking care of the present need and giving importance on recyclability, waste reduction, controlling pollution and reducing informality gradually.

The writer is Chief Executive Officer, Business Initiative Leading Development (BUILD)



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