TOKYO: Garment exports to Japan rose 14.02 percent to $652.55 million in fiscal 2014-15 partly due to relaxed rules of origin for Bangladeshi knitwear.
Rules of origin or RoO are a set of conditions that determine the source of a product, and are important in determination of duties and restrictions that often vary according to each product’s origin.
Knitwear exports in 2014-15 grew 10.43 percent to $279.78 million from the previous year, according to data from the Export Promotion Bureau. The relaxation in Japanese RoO for knitwear, which became effective in April, means that exporters will get duty-free access to Japan even if the items are made with imported fabric.
Exports of woven garment, which has been duty-free under the Japanese GSP (generalised system of preferences) for years, rose 16.89 percent to $372.77 million last fiscal year. Before the relaxed RoO, Bangladeshi knitwear exporters to Japan could only get duty-free access for items made with locally spun fabric.
Japan’s Prime Minister Shinzo Abe had promised to relax the knitwear export rules during a visit to Dhaka in September.
“Bangladesh could benefit more from the Japanese market by promoting non-cotton garment items as demand is higher in Japan,” said Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association.
Bangladeshi exporters were already getting almost zero-duty benefit on knitwear exports as local spinners met about 90 percent of the sector’s raw material requirements, he added.
“We must tap the promising Japanese market properly, especially keeping in mind the target to export $50 billion of garment products in 2021,” Hoque said. Japan’s annual garment sales are about $40 billion, and mostly met with Chinese supply.
Since 2008 Japan’s China-plus-One policy introduced to curb Japan’s dependence on China has moved local retailers to look for other suppliers such as Bangladesh, Vietnam and Cambodia.
Bangladeshi exports to Japan started to grow after the reciprocal visit of the prime ministers of both countries, said Akhtaruzzaman, managing director of Pacific Quality Control Co, a company which inspects potential exports to Japan. Earlier, Bangladesh was relatively unknown to Japanese customers, but its visibility has increased significantly as Bangladesh opened up to their outsourcing needs, he said.
