Bangladesh leads calls for easy rules of origin

Bangladesh, in its capacity as the coordinator of the least-developed nations, yesterday called for relaxation of the stringent rules of origin so that more products from LDCs can enjoy duty benefits.

The proposal will be considered by trade ministers from all over the world when they meet in the Kenyan capital on December 15 for the 10th Ministerial Summit of the World Trade Organisation.

The RoOs are the criteria used at the port of entry to determine the national source of a product for duty purposes, and easing them has been a longstanding demand of the LDCs from the developed and developing nations.

Due to strict rules, many products originating from LDCs are subject to barriers to entry or high duty.

For example, Bangladesh became a victim of rigid rules on exports of clothing items to Japan. The apparel items were manufactured from imported cotton or yarn, so they were not considered products originating from Bangladesh.

But in April this year, Japan relaxed its rules of origin, as of result of which Bangladesh is now enjoying duty benefits on export of knitwear items.

The proposal urged WTO members to streamline and simplify their RoO and make them “development friendly” to help LDCs “fully utilise the provided market access opportunities,” according to Bloomberg BNA. The LDC proposal essentially urges the member countries to avoid application of two or more criteria for a single product and to consider an alternative criterion instead.

In 2013, trade ministers in Bali agreed to ensure that preferential RoO applicable to imports from LDCs are “transparent and simple, and contribute to facilitating market access”.

In the years since, there have been “no substantial efforts” to streamline members' preferential rules in line with the 2013 Bali ministerial guidelines.

Commerce Minister Tofail Ahmed, who held a meeting with Roberto Azevedo, director general of the WTO in Geneva last week, said the LDCs also proposed the WTO for duty-free and quota-free market access for products originating from LDCs to the developing and developed countries.

At a press conference in Dhaka last week, Ahmed also said he demanded extension of the duration of TRIPs (Trade Related Intellectual Property Rights) agreement such that essential products of LDCs can enjoy flexible patent rights.

For example, as an LDC, Bangladesh is exempt from the implementation of the TRIPS agreement until 2016 for pharmaceutical products. This allows Bangladeshi consumers to benefit from cheap medicines.

The minister also said the LDCs demanded a waiver in services from the nations of the group.

There are currently 48 LDCs on the UN list, 34 of which have become WTO members.