Understanding Bangladesh-EU Relations: From Aid Dependence to Economic Partnership
Understanding Bangladesh-EU Relations: From Aid Dependence to Economic Partnership

Summary/Abstract: European Union (EU) remains one of the key priorities of Bangladesh foreign policy under Sheikh Hasina regime (2009-present). Notably, 58 per cent of Bangladesh’s total exports go to the EU while the EU is the destination of 64 per cent of Bangladesh’s total apparel exports worth US$ 34 billion. Bangladesh enjoys zero-duty benefit to the EU market under the scheme of ‘Everything but Arms’ framework. Bangladesh has been enjoying this benefit since 1973. Bangladesh will formally leave LDC group in 2026. The EU is expected to extend the preferential market access benefit for Bangladesh for three more years till 2029. This will impact Bangladesh’s future exports to the EU market. Thus, continuing EBA benefit in a new format or GSP plus facility, or zero-tariff benefit under the Free Trade Agreement would be the new area of focus of Bangladesh foreign policy under Sheikh Hasina regime. In fact, trade with the EU has transformed the lives of millions of people in Bangladesh. As a sign of friendship, the EU has allocated € 334 million (equivalent to US$ 389.31 million) for Bangladesh to mitigate the social and economic impacts of COVID-19 global pandemic. In addition, EU has also announced € 90 million (equivalent to US$ 104.91 million) for the garment workers in Bangladesh who lost the job due to the pandemic which demonstrates the importance that EU attaches to Bangladesh. More than 1000 garment factories in Bangladesh faced order cancellations worth US$ 2.97 billion during the COVID-19 pandemic. As a result, more than one million garment workers faced losing their jobs. Against the above backdrop, the article investigates: How can one understand the growing Bangladesh-EU ties from aid dependence to an economic partnership under Sheikh Hasina regime? And why does EU matter to Bangladesh vis-à-vis Bangladesh to EU? This paper contends that promoting EU-Bangladesh relations is of the interests of both the parties. Although Bangladesh-EU relations are important from a ranging of issues, i.e. economic, security, political and other issues, except forsome newspaper short pieces, no study is found on this issue, and this is where the rationale of this study lies. The study explores a number of possible areas where both the parties can engage further and foster their relations for the greater interests of the people of Bangladesh and EU.

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