Dhaka to pursue duty benefits for garment exports at WTO summit
Bangladesh will once again urge the United States and other developed countries at the upcoming summit of the World Trade Organisation to give duty-free access to garment items.
“We are trying to get duty-free entry for garment items to the US,” Commerce Minister Tofail Ahmed said at a media briefing yesterday on the country's preparations to attend the 10th WTO ministerial conference in Kenya on December 15-18.
Bangladesh is one of the highest tax paying nations in the American market and the country's garment exports to the US have maintained buoyant growth, he said.
The minister said the higher rate of duty and suspension of trade privileges could not stop the growth of garment exports to the US.
Ahmed, who is also the coordinator for the least-developed countries (LDCs) in the WTO summit, will lead the 19-member Bangladesh delegation.
According to the WTO's fifth ministerial conference in Hong Kong in 2005, the developed countries were supposed to give duty-free access to 97 percent of products originating in the LDCs.
The duty-free package was also gradually supposed to become 100 percent from 97 percent.
Many developed and developing countries have started allowing duty-free access to all products from the LDCs, including Bangladesh.
However, the US is still following the 97 percent-package for Bangladesh, keeping apparel items within the remaining 3 percent, out of the purview of the duty benefits.
Bangladeshi businesses have to pay 15.62 percent duty for export of garments to the US, whereas Vietnam pays 8.38 percent, China 3 percent and Hong Kong 1.16 percent.
Bangladesh paid $860 million in duties to the US government after exporting apparels worth $5.59 billion last fiscal year. The country paid $4.1 billion in duties to the US customs in the last five years.
Of the total annual exports to the US from Bangladesh, apparel accounts for 95 percent.
Bangladesh's garment exports to the US increased 17.58 percent year-on-year to $1.81 billion between July and October, according to the Export Promotion Bureau.
Garment exports also increased 2.85 percent year-on-year to $5.29 billion in the last fiscal year.
The potential of exporting pharmaceutical products from Bangladesh increased a lot with the relaxation of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) rules under the WTO up to 2033.
Bangladeshi companies currently export medicine to 160 countries, according to the minister.
The country's IT sector has also been performing well, as software exports are on the rise, he said.
The government plans to give cash incentives to some traditional and non-traditional export items -- pharmaceuticals, cottage industries and agro-products -- to boost exports, Ahmed said.
On the devaluation of the euro against the taka by 20 percent, the minister said Bangladesh received $3 billion less from exports in the last fiscal year due to the devaluation.
On Trans-Pacific Partnership Agreement, Ahmed said some countries have signed the mega deal mainly to weaken the importance of WTO.
Bangladesh will also propose relaxation of the rules of origin to boost exports to the developed countries.