'Agreements signed in 1972 and1974 were just a framework, having no operational basis.'

Manzur Ahmed, Chairman, FBCCI Standing Committee on WTO and RTAs, talks to Rifat Munim of The Daily Star about the "trial transit" vis-à-vis national and international laws.

The Daily Star (DS): The "trial run" for transit through Ashuganj river port has again raised the question of transparency on the part of the government. What do you think about this?
Manzur Ahmed (MA): The activities are being carried out as "trial transit." Then, however, mentioning the consignments as "import and export items" is outside the scope of any bilateral or international commitment of Bangladesh and beyond the jurisdiction of any Bangladeshi law. Tk.5.5 million is the annual payment made to Bangladesh by India to keep the inland water routes navigable. This is not a levy required to be imposed on cargoes carried on Indian vessels, which must pay transit charges as per international laws (WTO-WCO).
Besides, neither the land port at Akhaura nor the river port at Ashuganj is connected with proper roads to facilitate the movement of heavy vehicles carrying the Indian goods. The dilapidated conditions of the infrastructure of the river port along with the ravaged road link connecting Ashuganj, Akhaura and Agartala call for immediate suspension of all transit activities.
The agreements signed in 1972 and 1974 between Bangladesh and India were just framework agreements, having no operational basis. Invoking them to justify the present activities conducted in the name of transit is unreasonable. What is now being done through Ashuganj as "trial transit" under PIWTT is also confusing because the protocol was confined only to water routes, not to road or rail routes.

DS: On top of our run-down infrastructure, there are a number of unresolved issues regarding transit fees vis-à-vis invocation of the WTO rules, maintenance cost and a political consensus about the whole thing. Considering all these, do you think that we should or are ready yet to go for a transit deal with India and other countries?
MA: Providing transit to a third country with transit fees and charges is a WTO obligation, subject to the level of capacity building of LDCs like Bangladesh. Likewise, India is obliged to assist Nepal, Bhutan and Bangladesh with transit trade as a WTO obligation.
WTO covers issues relating to aspects of transit for international trade only conducted through imports and exports between the two member countries and it has absolutely no jurisdiction over domestic trade conducted between two business houses or states located in the same country.
The huge cost of maintenance of transit pathway with additional capacity building, as is evident now, with this meagre value added transportation bills is beyond any economic consideration and imagination. Bangladesh is not at all obligated to incur such huge investment to provide transit to any country under any law or undertaking, either national or international. In the case of Bangladesh, the cost of additional capacity will have to be funded by the beneficiary country in the form of grant or by the six international agencies responsible for such funding under WTO Aid for Trade scheme.

DS: Many believe that with the initiation of transit facility Bangladesh's market in Northeast India will be badly affected. What do you think about this?
MA: Bangladeshi companies' competitive advantage in the seven Indian states are under threat after the government allowed Indian traders to use Ashuganj as a transhipment hub for moving merchandise to the landlocked Northeast. Exporters have expressed their concern saying that the Kolkata-Ashuganj shipping link is detrimental to their business interest as the Indian firms practically pay nothing to move the goods through Bangladesh.

DS: How do you think the government should deal with transit in order to secure Bangladesh's interest?
MA: Transit fees are only to be levied at the entry and exit points on MFN (most favoured nation) basis as prescribed in GATT Article V 3-6 against the services rendered as mentioned in Annex E of the World Customs Organization (WCO), irrespective of whether the goods are carried through road, rail and river routes. But these fees and charges are only to cover the cost of services to be rendered, not to earn huge value added profit. Bangladesh can benefit from value added transit services only in case of transhipments through road, rail and river routes using domestic vessels by means of transportation bills and other cargo handling expenses including insurance coverage. It is neither necessary nor required by Bangladesh to consult with any country in this regard. NTWCL, an appointed agent of Indian Customs Agent, levies a clearing fee of 0.20% of the FOB value on Export and 0.30% of the CIF value on import trade traffic moving through the Phulbari-Banglabandh route. India did not consult any of the trading partners including Bangladesh to fix these charges.
However, considering the projected framework wherein WTO rules are being invoked when unnecessary and left out when necessary, I think Bangladesh is not going to benefit from the transit deal. Quite the opposite, it will incur heavy loss in certain sectors.
In the given context, Bangladesh should adopt and uphold the doctrine of third country transit as stated by Dr. Manmohan Singh in the inaugural session of 13th SAARC Summit, that "all South Asian countries would provide to each other, reciprocally, transit facilities to third countries."
The provisions of Protocol 5 of Asean Framework on transit and transhipment may be followed in this regard. Bangladesh should prefer transhipment in its territory.

DS: Thank you.