[ Online ] 17/04/2022
 
LDC graduation may result in 26pc export erosion: experts
Bangladesh may lose export orders worth $6.38 billion in a year in the European Union and five other export destinations after its graduation to a developing country from least developed one, according to a study presented at an event in Dhaka on Saturday.

The report presented in a seminar titled ‘export challenges of Bangladesh after graduation from LDC status: options for private sector’ organised by the Federation of Bangladesh Chambers of Commerce and Industries identified the loss of dutyfree market-access would be a big challenge for the export sector as 72 per cent of the country’s total exports get duty benefit.

The report, prepared by former Bangladesh Trade and Tariff Commission member Mostafa Abid Khan, identified loss of flexibility to provide export subsidy and 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.

Analysing the estimation of World Trade Organisation, Mostafa Abid in his presentation showed that after the LDC graduation on an average 8.91 per cent duty 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 per cent.

According to the report, on an average 14.47 per cent duty on Bangladeshi products would be applicable in Canada and Bangladesh might lose export by 42 per cent or $536.14 per cent in the market.

After the LDC graduation, it estimated that Bangladesh’s exports to Japan would decline by 30.53 per cent, to Korea by 27.53 per cent, to China by 8.29 per cent and New Zeeland by 11.90 per cent.

After the graduation Bangladesh will also lose duty-free market access in developed and some developing countries.

It will also lose preferential market access under the South Asian Free Trade Area and the Asia-Pacific Trade Agreement and special and differential treatment under WTO.

Mostafa Abid in his report said that extension of DFQF facility for additional period could be the short term option to meet the graduation challenges and free trade agreement with key export destination countries could be the long term solution.

Syed Nasim Manzur, former president of Metropolitan Chamber of Commerce and Industry, requested that the government should start negotiation to extend duty free market access up to 2030 to meet the graduation challenges.

He suggested to sign FTA with major export destination and to reduce the cost of doing business to remain competitive after the graduation.

Nasim Manzur, also the managing director of Apex Footwear Ltd, demanded that the government should extend same facility for other export sectors.

He suggested making investment in human capital development for meeting the future challenges.

Mozibur Rahman, the former chairman of Bangladesh Trade and Tariff Commission, said that to ensure the ease of doing business, an initiative for establishing national single window in 2009 was taken but it had not been implemented yet due to the National Board of Revenue’s position.

He demanded measures to separate the administrative and policy making wings in the NBR.

Mozibur hoped that Bangladesh would be able to face the graduation challenges and the grace period for the DFQF market access would be increased to five years due to the Covid pandemic and Russia-Ukraine war.

Ahmad Kaikaus, the principle secretary to the prime minister, said that the government had already identified the challenges of LDC graduation.

‘To some extent our principle is market economy and role of the government is to remove barriers of trade and business,’ he said.

The government is working constantly to remove the barriers, Ahmad Kaikaus said.

Ruling out the allegation of corruption in buying corona vaccine, he said that Bangladesh bought all the vaccine through World Bank and Asian Development Bank.

‘It is sad that some people are questioning our integrity although we have always worked with integrity,’ Ahmad Kaikaus said.

Commerce ministry senior secretary Tapan Kanti Ghosh said that market access would not be a problem for Bangladesh after graduation rather the lacks of diversities in export products would be a factor.

FBCCI president Jashim Uddin demanded equal treatment for all sectors to ensure export diversification.

He also demanded special arrangement for the small and medium enterprises so that the sector can remain competitive after graduation.