Home ›› 24 Dec 2022 ›› Editorial
It is about six months since the MC12 has been completed. For WTO, it is an achievement because there is at least an outcome whereas MC11 went without any declaration or outcome; on the other hand, MC12 was held after several postponements because of the pandemic and many other global issues.
As the largest LDC, Bangladesh has exploited the advantages of special and differential treatment (S&DT), unilateral schemes allowed for LDCs, bilateral and regional agreements, concessional financing, etc. In exchange for these, several S&DT will not be available after graduation, there will be erosion of market access preferences, stringent rules of origin, loss of concessional financing, and even whatever bilateral and regional agreements (e.g., SAPTA and SAFTA) available will be wearing away.
Now Bangladesh would need to look into the issues and the implications for going forward and closely follow the post-MC12 developments and the next MC13 – the only Ministerial remains for Bangladesh for participation as an LDC. Bangladesh will have to deal with WTO issues very carefully, while another less than four years remains, in the WTO there is no recognized group as graduating LDC, even if it is discussed may not be accepted.
LDCs who have graduated so far, that are previously graduated six LDC countries are small, their combined population is only five million, in that sense, Bangladesh’s graduation is an epoch-making story for the whole world. It is also true that Bangladesh has been termed a role model for the other LDCs.
A recent seminar elaborated that Bangladesh needs to be prepared very vigilantly on both home and global front so that it can fully use the total payback during the remaining four years. A recent WTO secretariat estimate shows that almost 90 per cent of all export losses of 12 graduating LDC will be for Bangladesh. While about 14 per cent of our global export may slump because of loss of preferential market access. These are all very significant messages we are expecting that image of the country will be increased, and foreign investment will be more attractive for Bangladesh after graduation.
There are a number of issues and discussions on how to take strategies for the new international support mechanisms (ISMs) some of which can be continued even after the graduation. The LDC group submitted a fresh proposal for the continuation of ISMs for another 12 years to the general council. Bangladesh was the key driver behind the proposal and supposed to be included in the MC12 outcome, however, not reflected at all.
A revised submission by the LDC group in support of graduating LDCs for smooth transition package, for special and differential treatment(S&DT) also diluted by not mentioning any time period for extending LDC-specific ISMs such as; DF-QF market access for graduating LDCs for a certain period, extension of export subsidies, extension of TRIPS, trade facilitation and, Dispute resolution mechanism etc.
MC12 Outcome document in its para-5 remotely included the issues of would-be challenges for the graduating LDCs, which is ultimately not enforceable, no working group has been proposed and no timeline or assurance of timelines has been given, thus almost no hope for follow-ups.
As there is no dedicated working group to discuss these issues, it is ultimately unclear which platform will discuss them. A dedicated working group can be proposed or it can be discussed in the standing forum of the committee for development policy (CDP).
It is almost a futile exercise to gather any special benefits even after graduation, so there is a need to shift out thinking, approach, and participation strategies taking full cognizance of treatment like as a developing country, not as an LDC.
There are some other wish lists included in the para-8 of the outcome document referring MC10 in Nairobi in regard to services supply from LDCs, referred MC9 for Duty Free Quota Free market access, committee for rules of origin, trade facilitation and aid for trade, which has no practical significance for Bangladesh, because of go slow process for the realization of these commitments, by this time graduation will be completed.
Bangladesh may not be able to enjoy the benefits of special and differential treatment allowed in the
WTO as there is no recognized group named a Graduating LDC, and common feeling is that there is no justification for creating a new group. On the other hand, there was a discussion that there could be a support mechanism which will be graded – based on the scale of development meaning economic vulnerabilities of all LDCs are not same. They do not need similar support for all.
The outcome of this negotiation may bring few benefits for Bangladesh.
On the other hand, some issues in the WTO, such as enhanced integrated framework (EIF) and Technology Bank can extend support to the graduating LDCs for additional years. However, adequate capacities to avail these resources by the concerned organization is a question.
Bangladesh would need to start preparing for MC13, which will be after one and a half years. Bangladesh will continue as an LDC country up to that period so that Bangladesh can play a double role as an LDC, as a Graduating LDC, and as a future developing country. By this time, we can secure some new set of ISMs as graduating LDC and at the same time, take required preparation for smooth graduation. The graduation strategy of Bangladesh would need to reflect very critical issues to exploit the full benefits of the situation.
Bangladesh would need to sustain a number of pressures from powerful countries of WTO after complete graduation. As per the MC12 outcome it delineated that a fully well-functioning dispute settlement system need to be accessible to all members by 2024. The members raised WTO reforms issues and LDCs specially contested the single undertaking modality meaning nothing is agreed unless everything is agreed. They are calling for reforms to be carried out in a participatory manner.
In some cases some Climate Change issues impacting trade related issues have been coming up in the discussion. Bangladesh having three hats should take active part in different negotiation as there could come a number of new issues even in the WTOs rule book. Some countries could start pressing for transparency in the notification issues, so Bangladesh needs efficient hands in the notification so that any changes in the trade-related measures in the domestic front cannot come up as a commitment.
Bangladesh would also need to have a careful eye on the support measures for graduating LDCs, one of them is the EU’s Everything but Arms or EBA scheme for another three years, Enhanced Integrated Framework(EIF) support for another five years, UN Capital Development Fund(UNCDF) which is finance related support for LDCs, Least developed countries climate fund(LDCF) operated by global environment facility(GEF) if project can be approved before graduation. Also, UN Technology Fund for LDCs for ICT knowledge sharing platform for five years, International Development Law Organization(IDLO) probono legal support which can be made available on-demand for legal and professional assistance to LDC government for five years. However, availing support from these schemes needs to follow stringent process, information, for which Bangladesh also needs to be ready.
In a recent presentation by CPD recommended for a Negotiation Cell in the Ministry of Commerce, with adequate negotiation capacity is an important issue. There is a pool of lawyers in Bangladesh are in practice in the country, however a few of them are engaged in WTO laws. A number of meticulous policies, time-bound reforms have to be structured to face practical challenges.
There are number of deadlines in front of ours, frequent changes are expected to come, as we have seen during last about six months after MC12 – some powerful countries are looking for transparency in notification process, plurilaterals are coming up as a dominated modalities, e-Commerce and involving private sector in a deliberative mode, bringing climate change issues in the agenda etc. Bangladesh must engage a pull of intelligent and skilled people to follow up on the on-going and up-coming activities and meetings of the General Council in the WTO to take an informative decision and gain from WTO issues.
The writer is CEO of BUILD a Public Private Dialogue Platform. She can be contacted at [email protected]
