By 𝘼𝙝𝙖𝙢𝙚𝙙𝙪𝙡 𝙆𝙖𝙧𝙞𝙢 𝘾𝙝𝙤𝙬𝙙𝙝𝙪𝙧𝙮
Former Head of ICD Kamalapur and Pangaon ICT, Chattogram Port Authority; Adjunct Faculty Member, Bangladesh Maritime University
Bangladesh’s graduation from Least Developed Country (LDC) status is a historic achievement, reflecting decades of steady economic growth, industrial expansion and export-led resilience. The ready-made garment (RMG) sector has been at the heart of this journey, transforming the country into one of the world’s leading apparel suppliers. Yet in global trade, progress rarely comes without trade-offs. For Bangladesh, the most immediate and demanding test of the post-LDC era will emerge in the European Union—its single largest export destination.
For years, Bangladesh’s competitive strength in Europe has rested heavily on preferential market access. Under the EU’s Everything But Arms (EBA) scheme, Bangladeshi apparel entered the market duty-free, allowing factories to scale up production, offer aggressive pricing and build deep relationships with major European brands. That advantage, however, is time-bound. As Bangladesh moves beyond LDC status, EBA preferences will gradually phase out after a transition period, fundamentally altering the cost structure of exports to Europe.
𝗧𝗵𝗲 𝗘𝗻𝗱 𝗼𝗳 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗰 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲
Once EBA benefits expire, Bangladeshi apparel will face standard EU tariffs unless the country successfully secures an alternative arrangement, most notably GSP+. While this may appear to be a technical policy shift, its commercial consequences are significant. The European apparel market is intensely price-sensitive, particularly for basic items such as T-shirts, underwear and casual knitwear. In such segments, margins are thin, and competition is fierce. Even an additional tariff of 8–12 percent can determine whether an order stays or shifts to another sourcing country.
Bangladesh’s export model to Europe evolved around the assumption of long-term preference. With that assumption no longer valid, the industry faces a structural adjustment rather than a temporary disruption.
𝗪𝗵𝘆 𝗕𝗮𝘀𝗶𝗰 𝗔𝗽𝗽𝗮𝗿𝗲𝗹 𝗙𝗮𝗰𝗲𝘀 𝘁𝗵𝗲 𝗚𝗿𝗲𝗮𝘁𝗲𝘀𝘁 𝗥𝗶𝘀𝗸
Among all apparel categories, cotton T-shirts best illustrate the vulnerability ahead. Bangladesh is one of the world’s largest exporters of cotton T-shirts, with Europe absorbing a substantial share of that output. These products are standardized, high-volume and highly substitutable. Buyers have multiple sourcing options, and purchasing decisions are driven primarily by cost, delivery time and compliance.
There is little room for price absorption in this segment. When tariffs reappear, Bangladesh’s cost advantage narrows immediately. Buyers are unlikely to wait for factories to adjust; instead, they will rebalance sourcing strategies, beginning with the most commoditised products. Small tariff disadvantages can therefore translate into disproportionately large losses in volume.
𝗔 𝗧𝗼𝘂𝗴𝗵𝗲𝗿 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗟𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲
The challenge is compounded by the fact that Bangladesh will not be navigating this transition in a static market. Competing apparel exporters are actively strengthening their positions through preferential trade agreements, improved logistics, deeper textile integration and diversified fibre capabilities. Many have shorter lead times and stronger backward linkages, enabling faster response to changing buyer demands.
Bangladesh, by contrast, still relies heavily on imported raw materials, extended lead times and scale-driven cost competitiveness. These structural limitations were partially offset by duty-free access. As preferences erode, they become more exposed.
𝗪𝗵𝘆 𝗕𝘂𝘆𝗲𝗿 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽𝘀 𝗔𝗿𝗲 𝗡𝗼𝘁 𝗘𝗻𝗼𝘂𝗴𝗵
There is a common belief within the industry that long-standing relationships with European buyers will shield Bangladesh from major losses. This confidence is overstated. Global apparel buyers operate on portfolio logic, balancing cost, risk and compliance across multiple sourcing countries. While Bangladesh may not be abandoned, its share in buyer portfolios is likely to shrink if it becomes structurally more expensive.
This erosion is unlikely to be abrupt. Instead, it may occur gradually—through smaller orders, fewer repeat programmes and reduced exposure in price-sensitive categories. Such slow declines are often harder to detect and even harder to reverse.
𝗚𝗦𝗣+ 𝗜𝘀 𝗖𝗿𝗶𝘁𝗶𝗰𝗮𝗹, 𝗯𝘂𝘁 𝗢𝗻𝗹𝘆 𝗮 𝗕𝗿𝗲𝗮𝘁𝗵𝗶𝗻𝗴 𝗦𝗽𝗮𝗰𝗲
Securing GSP+ status in the EU is essential to soften the immediate impact of LDC graduation. Without it, Bangladesh’s competitive position in Europe would weaken sharply. However, GSP+ is not a continuation of EBA under a different name. It comes with stricter requirements related to labour rights, environmental standards, governance and regulatory enforcement.
Meeting these conditions is achievable, but it demands sustained political commitment, administrative capacity and credible enforcement. More importantly, GSP+ offers time, not immunity. It delays the pressure; it does not remove it.
𝗧𝗵𝗲 𝗗𝗲𝗲𝗽𝗲𝗿 𝗩𝘂𝗹𝗻𝗲𝗿𝗮𝗯𝗶𝗹𝗶𝘁𝘆
Beyond tariffs, the post-LDC challenge exposes a deeper structural issue: concentration. Bangladesh’s export success is heavily concentrated in one sector, a narrow range of basic products and a limited number of markets, with the EU at the centre. This concentration amplified the benefits of preferential access. It will now amplify the risks as preferences decline.
In this context, post-LDC vulnerability is not merely about higher tariffs—it is about overexposure.
𝗪𝗵𝗮𝘁 𝗠𝘂𝘀𝘁 𝗖𝗵𝗮𝗻𝗴𝗲
The remaining transition period must be treated as a strategic window, not a comfort zone. EU market access needs to be elevated from a diplomatic discussion to a national trade priority. Progress on GSP+ readiness, regulatory reforms and compliance credibility must accelerate.
At the same time, the RMG sector must strengthen its value proposition in Europe. This does not require abandoning basic apparel, but it does require complementing it with higher-quality knitwear, sustainable and certified products, faster turnaround capabilities and compliance-led differentiation. European buyers are willing to pay more—but only when suppliers reduce their operational and reputational risk.
Productivity must also replace preference as the foundation of competitiveness. Improvements in logistics, energy reliability, skills development and digitalisation will matter far more in a post-preference environment than low wages alone.
Finally, export diversification is no longer optional. Expanding presence in alternative markets should be pursued as a long-term balancing strategy, not as a reactive fallback when preferences fade.
𝗕𝗲𝘆𝗼𝗻𝗱 𝗚𝗿𝗮𝗱𝘂𝗮𝘁𝗶𝗼𝗻
LDC graduation marks Bangladesh’s arrival as a developing economy, but it also signals the end of special trade treatment. The EU market will not adapt itself to Bangladesh’s transition. Bangladesh must adapt itself to the EU’s evolving rules.
If policymakers and industry leaders act decisively, the post-LDC era can become a period of consolidation, upgrading and resilience. If not, the loss of market share may be gradual, silent and difficult to reclaim.
Europe will remain central to Bangladesh’s apparel exports for years to come. The real question is no longer whether Bangladesh will remain in Europe, but under what conditions.
The era of preference is ending. The era of performance has begun.
