DEVELOPMENT-FRIENDLY OR IMPORT-FRIENDLY? THE NEW EUROPEAN UNION RULES OF ORIGIN AND THE APPAREL SECTOR IN BANGLADESH

Abstract: As of 2011 the European Union’s Rules of Origin ((RoO)) no longer require textiles to be sourced in the domestic economies of Least Developed Countries ((LDCs)) if they want to export their apparel under the zero-tariff, zero-quota preference scheme. Now, apparel manufacturers are free to use imported textiles. Informed by Normative Power Europe theory, this thesis identifies two core motives of EU decision making: a development-friendly historical motivation and an import-friendly motivation based on internal industry interests, which mesh together and make it difficult to determine whether the EU is a normative actor. The thesis further argues that outcomes of the RoO relaxation can be investigated by using the global value chain analysis, where the EU features as an external actor regulating the EU-Bangladesh apparel value chain. In Bangladesh, the matured knit sector seems unaffected by the relaxed RoO whereas the woven apparel sector seems to reap real benefits and the already troubled woven textile sector experiences negative externalities from the new criteria. Given LDCs’ minor EU market share and EU’s continued regressive policies towards developing countries, this new EU regulation contributes only a little to bridge the gap between EU’s narrative and its policies, yet serves well to uphold its normative image.