EU upset over BD deal on 14 US aircraft buys

Bangladesh's US deal to buy 14 aircraft from Boeing instead of France-based Airbus, which had vied long for the supply, upsets the European Union (EU) and the bloc seeks trade parity.  

During the Dhaka visit of French President Emmanuel Macron in September 2023, the government of Bangladesh reportedly committed to placing an order for 10 airplanes from Airbus, including A350 wide-body planes.

The then state minister for civil aviation, Mahbub Ali, told the media that they had asked for delivering 10 aircraft in phases.

However, neither the deal was signed nor did the Airbus supply any aeroplanes to Bangladesh's national flag-carrier Biman whose total fleet has Boeing's aircraft only.

However, this February, while Bangladesh's interim government signed a reciprocal tariff deal with the United States, the country pledged to buy over a dozen aircraft from Boeing to bridge bilateral trade gap.

 "Bangladesh shall endeavour to facilitate the increase in purchases by its national flag- carrier (Biman Bangladesh Airlines) of US civilian aircraft, parts, and services," the trade-off deal document reads.

"Biman Bangladesh Airlines intends to purchase 14 Boeing aircraft, plus a purchase option of additional aircraft," also stated in the agreement.

The deal, which awaits completion of applicable legal procedures from both countries, now has become a major concern for the European Union which in a letter this week to the new commerce minister renewed its anxiety.

A senior commerce ministry official told The Financial Express that the European Union is a single-largest destination of Bangladeshi products amounting to over 20 billion euros while exports to the US fetch less than US$9.0 billion.

He points out that Bangladeshi goods enjoy duty-free market access to the European Union while subject to paying high duties while entering the US.

The official says the EU in its latest letter mentioned the preference the US enjoys in trade with Bangladesh while "mistreatment" the European states face here.

 "The EU wants a level playing field, similar to the United States, in case of bilateral trade," says the official, preferring not to be quoted by name.

He mentions that Bangladesh is trying to secure GSP Plus status on the European market, which may be hampered due to the latest deal with the US avoiding France's aircraft manufacturer.

Contacted, commerce secretary Mahbubur Rahman told the FE Tuesday that the EU in November also expressed concern over this issue as reciprocal deal signing with the US was making progress.

He said neither Boeing nor Airbus will be able to enrich Bangladesh Biman's fleet as per long-term plans ranging up to 2035 as they will be able to supply only a few aircraft by then.

 "The Boeing will be able to supply only four to five planes by 2035 whatever orders are made," Mr Rahman said, adding that there is proposal to buy planes from Airbus as well.           

He mentions that Bangladesh has proposed to sign free-trade agreement (FTA) with the European Union.

 "It is a very good proposal for them," said Mr Rahman, adding that it will enable them to do barrier-free trade with Bangladesh.

syful-islam@outlook.com