Bangladesh's Boeing Deal Raises EU Trade Concerns

Bangladesh's Aircraft Procurement Decision

New Delhi, March 7: The choice of Bangladesh to acquire 14 aircraft from Boeing instead of opting for Airbus from Europe has sparked worries within the European Union. The bloc is now advocating for equitable trade relations with the South Asian country, as reported by local sources.

This situation arose following the signing of a reciprocal tariff agreement between Bangladesh's interim government and the United States in February. Under this arrangement, Bangladesh committed to boosting its purchases of American civilian aircraft and associated services, according to The Financial Express.

As part of this agreement, Biman Bangladesh Airlines, the national carrier, plans to acquire 14 Boeing aircraft, with the possibility of additional purchases.

The proposed transaction is contingent upon the completion of legal formalities in both nations and aims to reduce the trade deficit between Bangladesh and the United States, as highlighted in the report.

However, this decision has displeased the European Union, which had anticipated that Bangladesh would follow through with its previous intention to buy aircraft from Airbus.

During French President Emmanuel Macron's visit to Dhaka in September 2023, Bangladesh had reportedly pledged to purchase 10 Airbus aircraft, including A350 wide-body jets. Unfortunately, this order was never finalized, according to the report.

Currently, Biman Bangladesh Airlines operates solely with Boeing aircraft, and no Airbus planes have been delivered to the airline as of yet.

A senior official from the commerce ministry informed The Financial Express that the European Union represents the largest market for Bangladeshi exports, exceeding €20 billion, while exports to the United States are below $9 billion.

Sources indicated that the EU expressed its concerns in a recent correspondence to Bangladesh's commerce ministry, emphasizing that the bloc holds the largest share of Bangladeshi exports.

Bangladeshi products also benefit from duty-free access to the EU market, whereas exports to the United States encounter higher tariffs, they noted.

Consequently, the EU is seeking a "level playing field" akin to that provided to the United States in their trade agreements.

Officials have also suggested that this matter could impact Bangladesh's pursuit of GSP Plus trade status with the European Union, which would grant preferential market access for Bangladeshi exports.