Experts on Tuesday said Bangladesh will encounter a fall in the annual exports of US$ 330 million (Tk 26 billion) if the UK imposes tariff on Bangladeshi products cancelling their duty-free access after its exit from the European Union (EU) in March 2019.
"Bangladesh may encounter a fall in exports by around US$ 330 million and a slide in its real GDP by 0.1 percent due to the loss in preferences in the UK market," Dr Selim Raihan, Executive Director of South Asian Network on Economic Model (SANEM), said.
He came up with the statistics while delivering a lecture on "What does Brexit Mean for Bangladesh and Other Development Countries?" at SANEM conference room in the city.
Brexit, the exit of Britain from the European Union (EU), will have a significant economic and political effect not only on the EU economy but also on the world economy, he said, adding, "The developing countries like Bangladesh which were enjoying quota free access may face adverse effects."
Dr Raihan, also an Economics Professor at Dhaka University, mentioned that there will also be negative effects of Brexit on exports from pacific, CARICOM, other LDCs and Sub-Saharan African countries, but in different magnitudes.
Dr Mohammad A Razzaque, Adviser and Head of the International Trade and Regional Cooperation Section at Commonwealth Secretariat, chaired the event.
Dr Razzaque said Bangladesh's annual export earnings from the UK market alone will fall by US$ 430 million (nearly TK 34 billion) if at least 10 percent depreciation of British pound against Bangladeshi taka continues following the move for historic Brexit.
"Immediate after the referendum for Brexit, the UK pound faced a 10-20 percent tumble. If we estimate that at least 10 percent devaluation of pound will continue for one year, Bangladesh will lose US$430 million," he said adding that Bangladesh's export volume to the UK market is some US$ 4 billion.
Noting that Bangladeshi products now enjoy the EU's Generalized Scheme of Preferences (GSP) facility, he said if the UK imposes 12 percent tariff on average on Bangladeshi products, including readymade garments not restoring the quota-free access unlikely the EU, Bangladesh will have to pay extra US$265 million against the duty.
Bangladesh is going to uncertainty that whether and when UK will give such facility for Bangladeshi products, he added.
Dr Razzaque suggested that Bangladesh needs to conduct analysis what products may face tariff barrier to enter the UK market to diversify export products and search new market to cope up the possible adverse impacts on Bangladesh's export.
He also suggested that Bangladesh should build a proactive trade relationship with the UK and attract UK investment in some particular sectors so that the products from the sectors will face no tariff barrier to enter the UK market.
Besides, Bangladesh will have to play a leadership role among the 48 LDCs so that it along with all other LDCs get the duty-free access to the UK market, he said.