Bangladesh's total export to the UK may shrink by around US$ 330 million, if the country loses its quota-free access to the British market in the aftermath of Brexit, experts warned on Tuesday.
The fall in UK export may reduce Bangladesh's total export income by almost 1.0 per cent and trim the country's GDP by 0.1 per cent, they said.
The forecasts came from a lecture titled 'What does BREXIT mean for Bangladesh and other Developing Countries' in the city. South Asian Network on Economic Modelling (SANEM) organised the event.
Economists present in the session pointed out that Britain, being a member state of European Union, is currently offering Generalized System of Preferences (GSP) facility to Bangladesh.
"However, if UK is not able to offer the same GSP facility to Bangladesh in the post-Brexit era, the country's exporters will have to pay $ 265 million in tariff to send their products to the British market", said Dr. Mohammad A Razzaque, Adviser and Head of International Trade Policy of The Commonwealth Secretariat.
"Simultaneously, the ongoing devaluation of British Pound in the aftermath of Brexit referendum may cost the country around $ 430 million in terms of export, remittance and overseas development assistance."
Dr Razzaque also pointed out that until now the Bangladeshi exporters are following European standard and regulations for exporting their goods to UK.
However, once Britain comes out of EU, it will formulate its own rules and standards, which will have to be followed for exporting Bangladeshi products to UK, he said.
The observations come weeks after British Prime Minister Theresa May said Article 50, meant for beginning UK's exit from EU, will come into effect before the end of March 2017.
Since the Brexit referendum in UK in July there have been concerns over its possible impact on Bangladesh, including the risk of losing duty benefit on the country's exports to UK.
UK is Bangladesh's third largest export destination after US and Germany, and the second largest in Europe.
Bangladesh exported goods worth $ 3.23 billion to UK in 2014-15, registering a 21.28 per cent growth from the previous year, according to the Export Promotion Bureau (EPB). Garment products made up nearly 90 per cent of the export figure.
Experts in the programme also called for building a more proactive trade relationship with Britain to reap the benefit of Brexit.
"We need a more proactive trade policy in this ever-changing and interconnected world," said Dr. Selim Raihan, Executive Director of SANEM.
Economists pointed out that Brexit offers both challenges and opportunities for Bangladesh simultaneously.
"In the post-Brexit era, Britain will be looking for forging new trade ties with bigger and emerging economies outside EU, like India," Dr Razzaque said.
"In this context, Bangladesh, as a major LDC country, will have to play a leading role in global LDC forum, and will have to secure their trade facilities through the forum," he added.
Experts at the lecture also called for export diversification and exploration of new export markets to address possible external shocks (like Brexit) in the near future.
They also said Bangladesh can attract new investment from UK, especially in service sector and financial sector, through effective bilateral dealings.
"UK, being a leader in the global financial sector, can be a good source of foreign direct investment (FDI) for Bangladesh in this arena," Dr Razzaque opined.