Bangladesh’s apparel exports to Canada lost its shine in 2022 with Vietnam overtaking the country in the market thanks to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Vietnam overtook Bangladesh for the first time as the second largest apparel exporter in the Canadian market in 2022.
Bangladesh’s apparel exports to Canada in 2022 stood at $1.73 billion, which is 35.2 per cent higher than $1.28 billion in the previous year, according to International Trade Centre data.
The apparel exports of Vietnam to the Canadian market in 2022 increased by 46.35 per cent to $1.75 billion compared with those of $1.2 billion in 2021, the data showed.
The data showed that the share of Vietnam in the Canadian RMG imports increased to 14.10 per cent in 2022 from 9 per cent in 1018.
In the past five years, the share of Bangladesh in the Canadian apparel market grew to 13.9 per cent from 11.61 per cent.
The share of Chinese apparel in Canada decreased to 30 per cent in 2022 from 38.53 per cent in 2018.
Experts said that Vietnam’s exports to Canada started increasing after signing the CPTPP in 2018 as the agreement established duty-free access for trade in goods between the two countries.
Under the deal, Vietnam has been getting duty benefit in the Canadian market since 2019.
Under the treaty, Canada has eliminated 94 per cent of tax lines for Vietnamese imports, and Vietnam has eliminated approximately 66 per cent of tax lines for Canadian imports.
Although Bangladesh’s readymade garment is getting duty-free market access in Canada, the trade facility under the CPTPP and diversified products have made Vietnam the second largest apparel exporters in Canada beating Bangladesh, exporters and experts said.
China still remains as the largest apparel exporter to Canada with 30 per cent market share.
Chinese apparel exports to Canada in 2022 increased by 21.57 per cent to $3.77 billion from $3.1 billion in 2021.
‘Bangladesh would have to face tough competition in Canada as at least 17 per cent duty would be imposed on apparel products after the graduation of the country from the least developed country to a developing one in 2026,’ MA Razzaque, chairman of the Research and Policy Integration for Development, said at a recent programme.
He said that Bangladesh’s readymade garment was currently enjoying duty benefit in the Canada market, but after the graduation, the benefit would be eliminated for the country and Vietnam would enjoy duty-free access that time on the market.
At a meeting on ‘Identifying Issues Relating to the Upcoming New EU GSP Regulations’ organised by the commerce ministry on May 18, Razzaque presented a research paper showing that Bangladesh was grabbing the market share shifted from China in the European Union while Vietnam was taking the most advantage of shifting business from China in North America.
He said that LDC tariff preference was critical for Bangladesh in raising its apparel export market share.
With tariff preference, Bangladesh captures more than 22 per cent of extra-EU apparel imports, but in the Canadian market, Bangladesh is already under pressure, Razzaque said.
He suggested that the government should go for bilateral and regional arrangements with major trading partners to face the challenges of LDC graduation as Bangladesh RMG might not get the duty waiver benefits under the GSP Plus arrangement due to proposed safeguard measures in the proposed EU GSP scheme.
Bangladesh Garment Manufacturers and Reporters Association president Faruque Hassan on Saturday told New Age that Vietnam was enjoying advantage in Canadian market due to the CPTPP.
‘In 2022, Vietnam surpassed Bangladesh in exporting RMG in Canada, but we will regain our position in 2023 in the market,’ he said.
According to the ITC data, apparel imports by Canada in 2022 increased by 28.62 per cent to $12.45 billion from $9.68 billion in 2021.
RMG imports by Canada from Cambodia in 2022 increased by 22.61 per cent to $1.28 billion from $1.04 billion in the previous year.
