Assessing tariff and exchange rate pass-through in apparel export prices in the European Union: LDC graduation implications for Bangladesh
This study examines how tariff and exchange rate changes affect EU import prices for Bangladeshi apparel exports and the extent to which tariff preferences benefit exporters versus importers. The findings will inform trade policy and assess risks to Bangladesh’s export competitiveness following its graduation from LDC status.
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Razzaque-Islam-Rahman-Islam-Policy-Brief-December-2025.pdf
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- This policy brief examines the extent of tariff and exchange rate pass-through in Bangladesh’s apparel exports to the EU and assesses the implications for competitiveness after LDC graduation.
- Using counterfactual tariffs and export prices that replicate the post-graduation trade environment, the analysis estimates how much of the new tariff burden and currency depreciation is absorbed by exporters rather than passed on to EU importers and consumers.
- By jointly analysing tariff incidence and exchange rate pass-through, the brief provides timely evidence on the adjustment pressures facing the apparel sector and identifies policy-relevant insights to support Bangladesh’s transition to a more competitive, post-preference trade regime.
- It identifies policy-relevant insights to support Bangladesh's transition to a more competitive, post-preference trade regime.