Brazil has initiated a case against Bangladesh with the World Trade Organisation (WTO) and issued a notice of intent to impose anti-dumping duty on jute yarn.
In the notice Brasilia asked for Dhaka's explanation as to why Brazil should not impose duty on jute yarn as the product is being exported to that country at a price below the production cost.
The notice served on November 7, 2007 through the Bangladesh Embassy in Washington had stipulated a 40-day time both for the government and individual exporters to respond to the complaint.
If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be 'dumping' the product.
Meanwhile, local exporters, except one, feel reluctant to make any reply to the Brazilian notice as they see Bangladesh's exports volume to that country 'not significant in terms of quantity.'
But the government bodies expressed their concern over the exporters' attitude saying if the matter is not taken into consideration, other importing countries may take it as a precedent in future.
"Initiation of such a case and the possible imposition of duty will make it evident that Bangladeshi companies are dumping their products in other countries which should not be going on," said Mostafa Abid Khan, deputy chief of Tariff Commission and a trade negotiation expert.
He said the exporters should respond to the notice in the greater trade interest of the country.
"In 1992, Brazil initiated a similar case against Bangladeshi and Indian jute goods, but Bangladesh did not reply. India, however, responded to Brazil's complaint and finally, Brazil imposed duty on Bangladeshi jute goods but lifted the case against India," another official of the Tariff Commission said.
According to industry insiders, Usha Jute Spinners Ltd, a leading company that exports jute yarn to Brazil, responded to the Brazilian notice and sought time extension for proper explanation. But Brazil government asked the Bangladesh government and other exporting companies to reply individually, which made the exporters frustrated.
When contacted, Iqbal Haider, managing director of the Usha Jute Spinners Ltd, said they are frustrated at the complexity in communication with the Brazilian government.
He hinted at a halt to exporting jute yarn to Brazil in case of imposition of any anti-dumping tax.
The three other jute yarn producing companies are also not interested to respond to the notice.
The volume of exports of jute yarn to Brazil by four Bangladeshi companies reached 1446 tonnes in the 2006-07 fiscal from 1249 tonnes in the 2005-06 fiscal. It was only only 337 tonnes in the 2004-05 fiscal.