Govt hopeful of 12-year duty benefit
Bangladesh is hopeful that it will enjoy the duty-free export benefit for a more extended period after graduating from the grouping of the least-developed countries (LDCs) as the negotiation with the World Trade Organisation is underway.
The country was supposed to become a developing nation from an LDC in 2024, but the United Nations Committee for Development Policy (UNCDP), which assesses the transition procedures, has pushed back the deadline to 2026 following a request from Dhaka.
"We have sought an extension of the LDC-linked facilities for 12 years after the formal graduation to a developing country takes place," said Commerce Secretary Tapan Kanti Ghosh last week.
The WTO members might not grant the extension for 12 years, but they are positive about providing a reasonable time to graduating LDCs as all the LDCs, and the influential members of the global body agreed to extend trade facilities for low-income countries after their graduation, he said.
Because of the severe fallouts of Covid-19, which has hurt the poorest countries very hard, the demand for the time extension has grown louder.
According to the WTO, 10 per cent of the export of the LDCs has been impacted by the first phase of fallouts of Covid-19. So, the LDCs initiated a move for the continuation of the preferential trade treatment through the WTO in April.
Representatives of LDCs and developing and developed countries discussed the extension issue constructively in Geneva last week during the preparatory meeting for the 12th WTO Ministerial Conference.
Ghosh and senior officials from the commerce, foreign, planning and finance ministries participated in the meeting.
Bangladesh is also getting ready to place the demand for the extension for 12 more years in the WTO Ministerial Conference, the highest decision-making platform of the global body, in Geneva between November 30 and December 3.
"We expect that the WTO members will announce the extension in the conference," Ghosh said.
Along with other LDCs, Bangladesh will present a charter of demands to the developing and developed countries at the LDC Summit in Doha from January 22 and 27.
In the summit, various plans of action would be discussed for the LDCs to help them attain economic development and increase trade.
At the second triennial review by the UNCDP in February, Bangladesh received the final recommendation to leave the LDC category.
For the second time in a row, the country has met all three criteria, which are related to per capita gross national income, human assets and economic vulnerability to external shocks.
In March 2018, Bangladesh first met all three criteria.
According to the UN, an LDC needs to fulfil at least two criteria during two consecutive reviews, which take place every three years.
Bangladesh is the only LDC that has met all three criteria.
Getting a duty extension for a lengthy period is vital for Bangladesh as the country is expected to come under severe competition in global trade once it graduates due to erosion of the preferential trade benefit.
It will remain eligible for the trade benefit to the European Union for three more years as the bloc has extended the time as a grace period.
Once the country is finally considered a graduated nation by the EU, Bangladeshi exporters will face a 12 per cent duty in the European markets.
A free trade agreement signed by Vietnam and the EU will only intensify pressures on Bangladesh.