Bangladesh could lose export orders worth $6.38 billion in one year to the European Union and five other export destinations after its transition to a least developed developing country, according to a study presented at an event in Dhaka on Saturday.
The report presented at a seminar titled “Bangladesh Export Challenges after Graduating from LDC Status: Options for the Private Sector” organized by the Federation of Bangladesh Chambers of Commerce and Industry identified that the loss Duty-free market access would be a big challenge for the export sector since 72 percent of the country’s total exports enjoy tariff concessions.
The report, prepared by former member of the Bangladesh Trade and Tariff Commission Mostafa Abid Khan, identified the loss of flexibility to provide export subsidies and the loss of flexibility under the agreement. on trade-related aspects of intellectual property rights would be the challenges for the private sector in Bangladesh. after graduation.
Analyzing the estimate of the World Trade Organization, Mostafa Abid in his presentation showed that after the graduation of LDCs, an average duty of 8.91% would be applicable on Bangladeshi products in the EU market and the Possible export loss in the economic bloc would be $5.28 billion or 26.28 percent.
According to the report, an average duty of 14.47% on Bangladeshi products would be applicable in Canada and Bangladesh could lose exports by 42% or 536.14% in the market.
After the withdrawal of LDCs, he estimated that Bangladesh’s exports to Japan would decrease by 30.53%, to Korea by 27.53%, to China by 8.29% and New Zealand by 11.90%. %.
After graduation, Bangladesh will also lose duty-free access to developed and some developing country markets.
It will also lose preferential market access under the South Asian Free Trade Area and the Asia-Pacific Trade Agreement, as well as special and differential treatment under the WTO.
Mostafa Abid said in his report that the extension of the DFQF facility for an additional period could be the short term option to meet the challenges of graduation and that a free trade agreement with the main countries of destination of the exports could be the long-term solution.
Syed Nasim Manzur, former president of the Metropolitan Chamber of Commerce and Industry, has called for the government to start negotiations to extend duty-free market access until 2030 to meet graduation challenges.
He suggested signing an FTA with a major export destination and reducing the cost of doing business to stay competitive after graduation.
Nasim Manzur, also managing director of Apex Footwear Ltd, demanded that the government extend the same facility to other export sectors.
He suggested investing in human capital development to meet future challenges.
Mozibur Rahman, the former chairman of the Bangladesh Trade and Tariff Commission, said that to ensure ease of doing business, an initiative to establish a National Single Window in 2009 was taken, but it was not had not yet been implemented due to the position of the National Revenue Council.
He demanded measures to separate the administrative and political wings of the NBR.
Mozibur hoped that Bangladesh would be able to meet the graduation challenges and that the grace period for DFQF market access would be extended to five years due to the Covid pandemic and the Russian-Ukrainian war.
Ahmad Kaikaus, the prime minister’s principal secretary, said the government had already identified the challenges of LDC exit.
“To some extent, our principle is market economy and the role of government is to remove barriers to trade and business,” he said.
The government is constantly working to remove barriers, Ahmad Kaikaus said.
Dismissing the allegation of corruption in the purchase of the corona vaccine, he said that Bangladesh purchased all the vaccine through the World Bank and the Asian Development Bank.
“It is sad that some people question our integrity although we have always worked with integrity,” Ahmad Kaikaus said.
Principal Secretary of the Ministry of Commerce, Tapan Kanti Ghosh, said market access would not be a problem for Bangladesh after graduation, but lack of diversity in export products would be a factor. .
FBCCI Chairman Jashim Uddin demanded equal treatment for all sectors to ensure export diversification.
He also demanded special provisions for small and medium enterprises so that the sector can remain competitive after graduation.