BREXIT and its impact on Bangladesh Economy

Brexit is an abbreviation for "British exit." which refers to the June 23, 2016, referendum whereby British citizens voted to exit the European Union. The referendum roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades: Prime Minister David Cameron, who supported the United Kingdom remaining in the European Union, announced his plans to step down in October 2016, as a result.

The European Union represents 6% of the world's population But it accounts for more than 20% of global imports and exports. The EU emerges as the leading trade power in the world today. As such, it exhibits a strong interest in creating conditions in which trade can prosper. The European Union is specially committed to supporting developing countries' efforts to integrate into the trading system and to help them reap the benefits of market opening, giving them a hand where needed (Europa, 2004). The European Union applies this particularly trade policy to the poorest countries, for which the of globalization remain elusive. Furthermore, the European Union aims at free but fair world trade. The EUs trade policy now covers a broader canvas, beyond trade liberalization. It is about updating and improving international rules and giving trade partner countries a wider coverage to ensure fair trade and harnessed globalization.

Like the other LDCs, Bangladesh gets more trading benefit from the European Union. The EU works closely with Bangladesh in the framework of the EU-Bangladesh co- operation agreement since in 1976. This agreement provides broad scope for cooperation extending to trade and economic development, human rights, good governance, and the environment. Enhanced market access to the EU and an improved trading environment, the EU has provided the Generalized System of Preference (GSP) for Bangladesh. As such Bangladesh always enjoyed the advantage of duty and generally quota free access to the EU market. Export sector of Bangladesh has undergone structural changes in the decade of 80 in the last century with a significant shift from jute-centered exports to readymade garments and knitwear. The main items that Bangladesh exports to the EU are ready-made garments (90%), frozen food (6%) and others (4%) cover leather and leather goods, pharmaceutical product, and tea RMG, ready-made gurment, industry has virtually thriven in the competitive advantage of a quota free access to the EU market. Moreover, the EC's autonomous decision to grant dury and quota free access to all products produced in the less developed countries (with the exception of arms) comes up with new perspectives for Bangladesh. The main imports from the EU consist of transport equipment, textile and textile articles, food stuffs, beverages and tobacco, machinery and appliances, and chemical products. The balance of trade with EU, over the years, remained hugely in favor of Bangladesh.

Conclusion: The United Kingdom has finally decided to leave the European Union (EU) as per results of a referendum. Although it is still too early to predict the fallout of the Brexit which means British exit, it's true that the tumbling of the British pound to a 31- year low will affect trading of like It's true that it could put a negative impact on the Bangladeshi exports to the UK, which is the third largest export destination for Bangladesh products.

Bangladesh would have to go for bilateral negotiation to avail trade facilities. But then if the Brexit brings positive results for the economy of the UK it would not hit Bangladeshi exports, but if the exit leads to any adverse impact on the economies of the UK and the EU then the South Asian country. Bangladesh enjoys duty-free benefits for all products and flexible rules of origins for readymade garments in the EU. Due to Brexit, Bangladesh would have to need bilateral agreements to avail the the UK. If any crisis takes place in the economy of EU and UK due to Brexit, it will hit hard Bangladeshi export business.