‘We don’t need GSP in American market’
Commerce Minister Tofail Ahmed Sunday preferred reduction of discriminatory duty on Bangladesh’s garment products in the American market rather than reinstating GSP (Generalised System of Preferences) privilege.
“We don’t need GSP in the US market. If the US wants to help Bangladesh’s readymade garment industry, it has to cut the higher tariff rate on our apparels,” he said while speaking at a programme launching an investment company.
The Tau Investment Management, a New York-based growth equity firm, announced the launch of Tau Bangladesh and Tau Transformation Fund-1, the first regional operation, which will target textile and apparel manufacturers in emerging markets such as Bangladesh, Indonesia, China, Cambodia and Turkey.
Tau plans to invest US$1 billion in transforming global supply chains including Bangladesh.
Governor of the Bangladesh Bank Dr. Atiur Rahman, Deputy Chief of Mission of the US Embassy in Bangladesh Jon Danilowicz, Tau’s Chairman Dr. Oliver Niedermaier, operating partner in Bangladesh Osman Yousuf as well as leading apparel brand and garment manufacturers were present at the function.
Speaking as the chief guest, Mr Tofail Ahmed said Bangladesh’s garment export has increased after scrapping of GSP in the US market.
“So much has been talked in newspapers about the GSP, but it is not very important for us,” he said adding that the country used to get GSP privilege on some limited products that do not include garments.
He said Bangladesh pays the second highest duty for its garment export to the US but as one of the least developed countries, it does not enjoy zero-tariff benefit from them.
Bangladesh Bank Governor Dr. Atiur Rahman also said both the US and Bangladesh governments should consider the tariff rate reduction. “The policy makers should think how Bangladeshi apparel entrepreneurs pay this huge tariff and survive in this market,” he said.
He hoped that Tau Bangladesh’s longer term financing packages will be a significant contribution not only in catering to the immediate financing needs of textile and apparel sectors, but also in engaging intimately with the broader entrepreneurial community in Bangladesh.
Deputy Chief of Mission of the US Embassy in Bangladesh Jon Danilowicz offered dialogue among the stakeholders of garment industries for long-term and sustainable growth.
He appreciated current initiatives of Accord and Alliance in Bangladesh to ensure better work environment.
Oliver Niedermaier, CEO of Tau Investment Managemen, said, “Tau is fully committed to transforming the garment and textile industry in Bangladesh”.
Mr Niedermaier said the company has a plan to bring capital, expertise and western-style management to upgrade garment factories. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Atiqul Islam requested Tau to invest in the small and medium garment factories that badly need funds.
The regional operation will be based in Dhaka, and will be overseen by M. Osman Yousuf, Tau’s Operating Partner in Bangladesh.
Plans exist for the firm to set up an in country office and grow its local team, including the addition of a Country Director, in the second half of 2014.
The Tau Transformation Fund I will allow the firm to transform its future portfolio companies to become sustainable and modern enterprises, operating at scale within their industry.
“The Tau Transformation Fund I will pave the way for other private equity funds to partner with us and invest in Bangladesh,” said M. Osman Yousuf, Tau’s Operating Partner in Bangladesh.
Source: The Financial Experss
