Aircraft Deal Impacts Trade Relations: EU Seeks Parity with Bangladesh

Bangladesh’s Boeing Order Raises EU Concerns Over Trade Balance​

Boeing Aircraft Deal with the United States Draws Scrutiny from the European Union​

New Delhi, March 7: Bangladesh’s decision to move ahead with a plan to purchase 14 aircraft from US aerospace manufacturer Boeing instead of European aircraft maker Airbus has triggered concern within the European Union, according to a report.

The development comes as the EU seeks parity in its trade relationship with the South Asian nation.

Aircraft Purchase Linked to US Tariff Agreement​

The issue surfaced after Bangladesh’s interim government signed a reciprocal tariff agreement with the United States in February. Under the agreement, Bangladesh committed to increasing purchases of US civilian aircraft and related services.

According to a report by The Financial Express in Bangladesh, national flag carrier Biman Bangladesh Airlines plans to acquire 14 Boeing aircraft, with an option to buy additional planes.

The proposed transaction is still subject to the completion of legal procedures in both countries. The arrangement is intended to help reduce the bilateral trade gap between Bangladesh and the United States.

Airbus Plan Remains Unfulfilled​

The move has drawn attention from the European Union, which had anticipated that Bangladesh would proceed with a previously discussed aircraft purchase from Airbus.

During French President Emmanuel Macron’s visit to Dhaka in September 2023, Bangladesh had reportedly committed to purchasing 10 Airbus aircraft, including A350 wide-body jets. However, the order was never finalized.

At present, Biman Bangladesh Airlines operates an all Boeing fleet, and no Airbus aircraft have been delivered to the airline.

EU Highlights Its Role in Bangladesh’s Export Market​

According to a senior official from Bangladesh’s Ministry of Commerce, the European Union remains the largest destination for Bangladeshi exports, which exceed €20 billion.

By comparison, exports from Bangladesh to the United States total less than $9 billion.

Sources cited in the report said the European Union recently communicated its concerns through a letter to Bangladesh’s Ministry of Commerce, noting that the bloc accounts for the largest share of Bangladeshi exports.

Duty Free Access and Trade Balance Concerns​

Bangladeshi products currently enjoy duty free access to the EU market, while exports to the United States are subject to comparatively higher tariffs.

As a result, the EU has sought a level playing field in trade arrangements, similar to the concessions extended to the United States.

GSP Plus Status Could Be Affected​

Officials also indicated that the issue could have implications for Bangladesh’s efforts to secure GSP Plus trade status from the European Union.

Such status would extend preferential market access to Bangladeshi exports in the EU market.