EU-Bhutan Trade figures show that besides trade support, the European Union (EU) has been assisting Bhutan in its development activities as well over the years
The European Union (EU) imported a total of USD 24 million (M) worth of goods from Bhutan in 2022, surpassing the combined figures of the preceding three years. Although the figures seem insignificant, there are various products and articles from every sector in the Bhutanese economy that maintained the range of diversity in exports from the country to the EU member states. Around 95 percent of those earnings were made from the export of iron and steel products.
From an assortment of various products, EU countries imported USD 23.63M worth of iron and steel products from Bhutan in 2022. Machinery, boilers and others constituted USD 143,000 while essential oils, perfumes, cosmetics and toiletries made up USD 88,000.
Electrical and electronic equipment exports were worth around USD 62,000. Bhutan also exported coffee, tea, mate and spices which summed up to USD 33,000. In the aeronautics and related periphery, USD 27,000 worth of assortments were exported from the country.
Agricultural products like oil seed, oleagic fruits, grains, seeds and other fruits caught the USD 26,000 mark, while wood pulp, fibrous cellulosic material and waste garnered in USD 18,000. Exports of Aluminum exports also touched around the same value.
Miscellaneous edible preparations, other textile made articles and worn clothing accumulated around USD 10,000. Products like furniture, charcoal, printed books, optical and medical apparatus, animal gut, carpets, pharmaceutical products, dyeing extracts, beverages, dairy products, animal fodder and other articles made up the rest of the list in the exported items.
Earnings from exports to the EU slumped to its lowest in 2016 when the figures sank close to USD 4M. The year that grossed the highest income from exports to the EU was in 2015 when the figures soared close to USD 60M.
Meanwhile, the European Union-Bhutan cooperation was kick-started with a development project in 1982, focusing on renewable natural resources. The EU-Bhutan Trade Support project aims at economic diversification and export promotion. The project-related activities support improving of the national trade and investment regulatory framework, contributing to increased exports of horticulture products (ginger, turmeric, mushrooms) and textile handicrafts (home decor pieces, shawls, stoles). The project mainly seeks to increase incomes along the two value chains and contribute to economic growth and poverty reduction.
Project activities include trade capacity building and technical assistance, with a strong focus on training and skills development. The EU expects to reinvigorate the Brand Bhutan initiative by strengthening national skills for formulating and implementing trade and investment policies, developing integrated and market-led value chains and building supply-side capacities to export products. The project integrates crosscutting issues, particularly women and youth, gender equality and protection of the environment, into the design and implementation of the activities, in line with Bhutan’s policies and priorities. The EU provides a support of €4 million as trade assistance to not only help increase and diversify Bhutanese exports but also to respond to the expected economic blows in the sector and further boost the economy.
Diplomatic relations between the Royal Government of Bhutan and EU were established in 1985. The relationship was further cemented in 2004 when the EU and Bhutan held their first biennial consultation, covering all aspects of bilateral relations, regional and international developments, as well as discussions on subjects of mutual interest.
In other areas, the EU-Bhutan relations are grounded on a longstanding and robust friendship, working together to safeguard women and children’s rights, promote gender equality, good governance and democratic values, combating climate change, reducing poverty and fostering cooperation with civil society organizations.
The EU Ambassador and Head of Delegation of the EU to India, based in New Delhi is concurrently accredited to Bhutan. Bhutan has an Embassy in Brussels, accredited to the EU and to several EU Member States. Regular visits of the EU Ambassador to Bhutan, often jointly with Ambassadors of the EU Member States, provide opportunities for in-depth discussions to further strengthen the EU-Bhutan partnership.
In 2015, the closing year for the Millennium Development Goals, the then Prime Minister of Bhutan, Dasho Tshering Tobgay, was the first ever Bhutanese Head of Government to visit Brussels. In June 2019, the newly elected Prime Minister Dasho Dr. Lotay Tshering also visited Brussels. At the invitation of the President of the then European Commission, Jean-Claude Juncker, the dignitaries participated at European Development Days (EDDs) in 2015 and 2019 respectively.
Robust EU-Bhutan relations are also reflected in parliamentary ties with regular exchanges in parliamentary delegation between Bhutan and EU Member States.
The EU also committed to continue its support to Bhutan during the transition from Least Developed Countries (LDCs) and beyond the country’s graduation. In this context, new and innovative tools will be developed for the financing of development activities, adopted to the evolving circumstances.
Further, the Royal Government of Bhutan and the European Investment Bank (EIB) are working towards a possible Framework Agreement, which once ratified by the Parliament of Bhutan, would enable the EIB to provide sustainable finance for physical and social infrastructure, at the request of the Bhutanese government and relevant private sector counterparts.
Tashi Namgyal from Thimphu