Bangladesh faces key graduation milestone, needs more equal trade ties with EU: Ambassador Miller

Bangladesh is approaching a critical milestone of LDC graduation and needs to establish a more "eye-to-eye" commercial relationship with the European Union, its largest economic partner, said Michael Miller, ambassador of the European Union to Bangladesh.

"We are therefore carefully assessing the request that we have received to negotiate a free trade agreement with Bangladesh," he said, adding that regardless of the graduation timeline, Bangladesh should plan ahead to boost competitiveness, circularity and eco-efficiency.

The EU envoy made the remarks at a seminar titled "Accelerating Circular Transition in Bangladesh's Textile Industry: Insights from SWITCH2CE Pilots", jointly organised by the Ministry of Commerce and BGMEA at Hotel InterContinental in the capital today (6 May).

The ambassador said Bangladesh should utilise the remaining time before graduation to create conditions that stimulate investment, remove trade irritants, including discriminatory practices, and ensure predictable market access to the EU.

Highlighting the importance of the circular economy, Miller said it is a cornerstone of the EU's growth strategy aimed at decoupling economic growth from resource use and achieving carbon neutrality by 2050.

"Our focus on circularity is part of a drive towards a more competitive and resource-efficient Europe," he said, quoting European Commission President Ursula von der Leyen's call to move away from the "take-make-waste" model and towards reuse and sustainability.

He noted that adopting circular practices such as recycling, material substitution and improved resource efficiency can significantly reduce costs and drive innovation.

Turning to the textiles and garments sector, Miller said it remains a priority for circular transition due to its scale and waste generation. The EU produces over 5 million tons of textile waste annually, while Bangladesh generates around 600,000 tons each year.

"These realities, along with concerns over social conditions and fast fashion, have driven the EU to act," he said.

He highlighted that the EU's 2022 strategy for sustainable and circular textiles includes ambitious measures such as eco-design requirements, extended producer responsibility, mandatory digital product passports and stricter rules on greenwashing.

In addition, recent sustainability directives have embedded circularity into corporate accountability frameworks.

"These policies matter for Bangladesh, as Europe is your largest export market, dominated by RMG products," Miller said, noting that Bangladesh's garment sector contributes about 11% to GDP and employs around 4 million workers.

Michael Miller said the EU is working closely with Bangladesh to support this transition, including through the SWITCH to Circular Economy (SWITCH2CE) project, co-funded with Finland's Ministry for Foreign Affairs.

Under the initiative, brands like H&M and Bestseller are leading pilot projects to scale textile recycling, improve sorting of blended waste and track post-industrial scrap. Meanwhile, UNIDO and Chatham House are supporting policy development with the Ministry of Commerce and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The European Investment Bank has also signed a €60 million loan agreement with BRAC Bank to finance circular investments for SMEs in Bangladesh.

Beyond SWITCH2CE, the EU is providing advisory support through programs like SWITCH-Asia to help governments develop policies on sustainable consumption and production.

"We are investing in the greening of Bangladesh's power sector because circularity requires clean energy," Miller said, adding that the EU has long supported sustainable factories through affordable financing and plans to invest in upskilling workers with green skills.

Referring again to LDC graduation, Miller emphasised the importance of forward planning to ensure a smooth transition and sustained access to EU markets.

"Regardless of the date of graduation, we encourage Bangladesh to plan ahead… to create conditions conducive to a smooth graduation and predictable trade and market access to the European Union," he added.

Commerce Secretary (routine charge) Md Abdur Rahim Khan chaired the event.

Commerce Minister Khandaker Abdul Muktadir and BGMEA President Mahmud Hasan Khan also spoke.