Bangladesh can appoint lobbyists for getting a duty benefit for export of garment items to the US market, as the chance of the duty-free access is very thin through bilateral negotiation, analysts said yesterday.
Though Bangladesh is a least developed country, its businesses have to pay 15.62 percent duty for exports of garments to the US. But China, the largest apparel supplier worldwide, pays only 3 percent duty to the American customs.
Michael J Delaney, assistant US trade representative for South Asia, told the first Ticfa meeting in Dhaka on Monday that it was not possible to reduce duty on Bangladeshi garments as the issue depends on the World Trade Organisation.
Khondaker Golam Moazzem, additional director of the Centre for Policy Dialogue, said it might not be possible for Bangladesh to get the duty benefit through bilateral discussion, as the US usually considers the issue under a multilateral system.
But if the US Congress can be influenced through lobbying, Bangladesh can get the duty benefit without going to the WTO, he said.
Generally, duty on exports of manufactured goods is higher in the US market compared with capital machinery and primary goods.
"This is one of the major reasons for higher duty on Bangladeshi garment exports," he said.
Trade and Investment Cooperation Forum Agreement (Ticfa) is a platform for dialogues only, not for taking any decision, Moazzem said, adding that Bangladesh should continue putting pressure on the US.
Mostafa Abid Khan, a director of Bangladesh Foreign Trade Institute and one of the negotiators from Bangladesh side in the first Ticfa meeting, also suggested appointing lobbyists.
“The US is not legally bound to give us the duty benefit as the issue is still pending with the conclusion of the Doha Development Agenda of the WTO.”
He said: “Giving duty benefit solely depends on the US. If they want, they can give it to any country even unilaterally. But, this kind of an incident is rare.”
He said India has also given Bangladesh duty-free access for all products except 25 alcoholic and drug items as the country had been putting pressure on India for long.
India, Japan and many other countries, where Bangladesh enjoys duty benefits, did not wait for any WTO decision, Khan said.
“If we can continue putting pressure on the US, they may allow us the duty benefit. But, we need to hold negotiations regularly. Ticfa is a good platform for such negotiations,” Khan added.
He also said, if the US government wants to give the duty benefit to Bangladesh, it will have to seek a waiver from the WTO.
Mahbub Ahmed, senior secretary to the commerce ministry, said Bangladesh will have to continue dialogues, both bilaterally and multilaterally, with the US for the getting the duty benefit.
“The US has given duty benefit to many countries on different grounds,” Ahmed said.
On exports of goods to the US market, Vietnam pays 8.38 percent duty, Indonesia 6.36 percent, China 3 percent, Germany 1.16 percent, India 2.29 percent, Turkey 3.57 percent and Hong Kong 1.25 percent.
Bangladesh paid $828 million in taxes to the US customs last year and $3.38 billion over the last five years, according to data from the commerce ministry.