Case Studies on EBA countries

• Author: Development Solutions Europe Limited, Directorate-General for Trade (European Commission)
• Pages: 163-202

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6 Case Studies on EBA countries

This section wi ll provide an in-depth overview of the impact of the EBA on Bangladesh

(Section 6.1) and Ethiopia (Section 6.2). The economic, social and human rights, as

well as environmental impacts of the scheme will be discussed. This will be followed by

discussions on the distribution of gains and the unintended consequences of the schem e.

6.1 Impact of the EBA on Bangladesh

6.1.1 Economic impact

The EU is a long-term trade and development partner for Bangladesh, as Bangladesh has

enjoyed preferential access to the EU market since 1971 under the GSP. Bangladesh has

benefitted from the Everythi ng but Arms Arrangement (EBA) since 2001. The country is

the l argest b eneficiary of the EBA a rrangement, accounting for 66.2per cent of all EBA

exports to the EU in 2016.

Additionally, the EU is the main destination for Bangl adesh’s exports, accounting for 43.3

per cent of its total exports in 2016.298 In the same year, the value of exports to the EU

amounted to EUR 16,245 million, constituting an increase of 80.4 per cent since 2011

and 50.1 per cent since 2013. Figure 39 below illustrates this significant increase in

export value.

Figure 39: Bangladesh’s total exports to the EU (2011-2016)299

The EBA gives Bangladesh an important competitive advantage vi s-à-vis its competitors

such as China, India, Turkey and Vietnam that do not enjoy similar preferential access,

especially in the ready-made garment (RMG) sector. In this sense, the scheme has

played an important role in expanding Bangladesh’s exports to the EU.

As ill ustrated by Fi gure 40b elow, Bang ladesh’s export bas ket i s rel atively undi versified.

It consists mainly of clothing, textile and food products. HS Chapters 61 and 62 are

298European Commission. (2017). Available at:

http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113349.pdf

299Source: own calculations based on trade data supplied by the European Commission.

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

2011 2012 2013 2014 2015 2016

IN MILLION EUR

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dominant i n Bangl adesh’s exports to the EU and accounted for over 90 per cent of the

EU’s total imports from Bangladesh in 2016. The value of th ese exports has steadily

increased over the years.

Figure 40: Composition of Bangladesh’s exports under EBA by HS Chapter (2016)300

Other EU imports include fish and crustaceans (HS Chapter 3) and leather goods (HS

Chapters 41 and 42). These goods are imported to a significantly lesser extent than

textile products.

Bangladesh has a high preferenc e utilisation ra te under the EBA. Out of the EUR 16,182

million eligible exports in 2016, EUR 15,559 million were exported using EBA

preferences. This constitutes an average utilisation rate of 96.35 per cent. As illustrated

by Figure 41 below, t he utilisation rate has increased by 1.76 percentage points since

2011. Through the stakeholder consultation process, it has become evident that the

country has benefitted from the reformed RoO requirements, which resulted in an

increased utilisation of EBA preferences, especially for woven products.301 Before the

reformed RoO were introduced in 2011, the utilisation rate was only 80.9 per cent.

300 Source: own calculations based on trade data supplied by the European Commission. Pie chart is to be read

in a clockwise direction. HS Chapters description: 3: Fish and crustaceans, molluscs and other aquatic

invertebrates; 24: Tobacco and manufactured tobacco substitutes; 41: Raw hides and skins (other than

furskins) and leather; 42: Articles of leather; saddlery and harness; travel goods, handbags and similar

containers; articles of animal gut (other than silk-worm gut); 61: Articles of apparel and clothing accessories,

knitted or crocheted; 62: Articles of apparel and clothing accessories, not knitted or crocheted;63: Other made

up textile articles; sets; worn clothing and worn textile articles; rags. 64: Footwear, gaiters and the like; parts

of such articles; 65: Headgear and parts thereof; 87: Vehicles other than railway or tramway rolling-stock, and

parts and accessories thereof.

301 Stakeholder Workshop Bangladesh, 7 February 2017

53,15%

38,51%

2,26%

1,93%

1,90%

0,40%

0,34%

0,27%

0,20%

0,18%

0,85%

1,50%

Apparel and clothing

(crocheted)

Apparel and clothing

(not crocheted)

Footwear

Other made up textiles

Fish and crustaceans

Vehicles

Articles of leather

Raw hids and skins

Headgear

Tobacco and tobacco

substitues

Other

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Figure 41: Bangladesh’s EBA preferential exports (2011-2016)302

A more detailed analysis of the utilisation rate for specific export products shows that

utilisation is generally high. Despite the relatively low export value of fish and

crustaceans, HS Chapter 3 had the highest utilisation rate in 2016 (99.9 per cent). The

average utilisation rate for HS Chapters 61 to 64 i n 2016 was 95.9 per cent, while HS

Chapter 53 (other vegetable textile fibres; paper yarn and woven fabrics of paper yarn)

had the lowest utilisation rate of all the HS Chapters displayed in Figure 42. Almost 85

per cent of these exports did not use EBA preferences.

Figure 42: Bangladesh’s EBA preference utilisation for top ten exports in 2016303

302 Source: own calculations based on trade data supplied by the European Commission.

94,59%

95,64% 95,70%

96,06%

97,50%

96,35%

93,00%

93,50%

94,00%

94,50%

95,00%

95,50%

96,00%

96,50%

97,00%

97,50%

98,00%

0,00

2000,00

4000,00

6000,00

8000,00

10000,00

12000,00

14000,00

16000,00

18000,00

2011 2012 2013 2014 2015 2016

IN PERCENTAGES

IN MILLION EUR

Total EU Exports GSP Eligible Exports

GSP Preferential Exports Utilisation Rate

0,0 2000,0 4000,0 6000,0 8000,0 10000,0

Articles of apparel (crocheted)

Articles of apparel (not crocheted)

Footwear

Other made up textile articles

Fish and crustaceans

Vehicles other than railway

Articles of leather

Raw hides and skins (other than furskins) and leather

Headgear and parts thereof

Other vegetable textile fibers

IN MILLION EUR

HS CHAPTERS

Bangladesh's total exports to the EU Bangladesh's total exports under EBA