Dhaka seeks duty-waiver for 12 more years past LDC graduation
Bangladesh has demanded before the United Nations export duty waivers on its products for 10 to 12 years past its graduation from a least developed country (LDC) to a developing one in 2024, said a top commerce ministry official yesterday.
Bangladesh has been lobbying with international communities, like the LDC group of the World Trade Organisation (WTO), for the waiver, said Commerce Secretary Md Jafar Uddin.
This is because the country's economy, exports, supply chains and employment have been severely damaged from the fallouts of the Covid-19, he said.
Bangladesh will graduate to a developing country in 2024 as the country proved its eligibility in all three prerequisites set by the UN Committee for Development Policy (UN CDP).
The three prerequisites are on gross national income, human assets index and economic vulnerability index. Next year the UN CDP will assess the country's graduation requirements again.
Last month, the commerce ministry sent a letter to the European Union (EU) for the continuation of the Generalised System of Preferences (GSP) under its Everything but Arms (EBA) initiative for 10 more years following the graduation.
Bangladesh has been enjoying the zero-duty benefit to the EU under the EBA since it gained independence in 1971.
The EU is the country's single largest export trade bloc where 58 per cent of its exportable goods are destined for and 64 per cent of its garment exports are bound for in a year.
Only the EU has already announced that the trade bloc will continue the zero-duty benefit for Bangladesh after the graduation for three more years as a grace period for preparations.
However, Bangladesh demanded 10 years instead of three years as the country's economy has been severely damaged.
Other developed or developing countries did not assure for any extension of the tenure for Bangladesh's zero-duty benefits after the graduation.
Jafar Uddin also said as per the WTO's previous announcement, Bangladesh was supposed to be immune from the restrictions stemming from patent rights of medicine under its Trade Related Aspects of Intellectual Property Rights (TRIPs) up to January 1, 2033.
However, there is a possibility of the abolishment of such facilities once the country makes the graduation.
"We demanded that the UN continue with the patent rights for our country up to 2033 as per the previous announcement," the commerce secretary said.
In both cases, Bangladesh has been lobbying along with its other LDC peers for the trade benefits to be granted for 10 to 12 years.
The LDC countries will hold discussions on the Bangladesh's proposal today, he said.
Bangladesh's export will decline 5.7 per cent annually if the EU's EBA initiative is not extended, as local exporters will then have to face an 8.7 per cent duty on exports to the bloc.
So, there is a possibility of losing more than $2 billion worth of export business annually after the graduation, according to the United Nations Industrial Development Organisation.
Bangladesh will have to ratify 27 international conventions including four core conventions on good governance, labour rights, human rights and environmental protection if it wants to secure the much-required GSP Plus to enjoy the zero-duty benefit to the EU after the graduation.