Dhaka must play multi-pronged role

Bangladesh has to play a multi-pronged role towards retaining the trade benefits in the upcoming WTO-Ministerial Conference 12, scheduled for November 30-Decmber 3 in Geneva, the Centre for Policy Dialogue (CPD) said on Thursday.

CPD distinguished fellow Professor Mustafizur Rahman came up with the remarks while addressing virtual dialogue titled “Upcoming MC12: Bangladesh’s Expectations and Possible Stance”.

To reap most benefits for a sustainable graduation, Bangladesh has to play a role in three perspectives – as a LDC, a graduating LDC and as a future developing country.

“Bangladesh as a graduating LDCs will need to take advantage of its status as LDCs over the next few years, strive to secure a new set of International Support Measures (ISMs) as a graduating LDC and, most importantly, take adequate preparation towards sustainable graduation,” said Rahman.

Members granting unilateral trade preferences to LDCs shall seek to have procedures in place to extend and gradually phase out their preferential market access scheme over six to nine years after entry into force of a decision of the UN General Assembly to exclude a country from the LDC category, said the economist.

Meanwhile, the country should move towards bilateral negotiation for extending trade and duty-free benefits from different blocs and countries.

“Urge the countries providing preferential market access to LDCs on bilateral basis or as part of regional agreements (such as EU, SAFTA) to extend the preferences for a time-bound period,” said Rahman.

Rahman suggested designing a debt relief initiative for graduating LDCs to incentivise graduation and release funds to undertake activities in support of sustainable graduation.

On top of that, Bangladesh has to set a strategy reflecting recommendations and findings of the sub-committees formed to look into LDC graduation.

“The sustainability of LDC graduation will depend on the preparation to tackle the challenges. Time bound extension of preferential is very important and to this end Bangladesh has to set a smoother transition strategy,” said Nazneen Ahmed, country economist, UNDP Bangladesh.

Bangladesh has formed several sub-committees to work on the challenges and inputs of these committees should be reflected in the transition strategy, said the economist.

Graduation is not about duty-free market access but many more. Resource mobilisation, intellectual property rights and investment should be considered for a smoother graduation and handling the post-graduation challenges after the LDC graduation, said Nazneen.

On top of that, Bangladesh has to strongly negotiate to make a rule based system functional with 16 graduating LDC countries.

For a weaker economy, rule based trade benefits are good and Bangladesh has to strongly negotiate with its peer countries to implement WTO decisions taken to ensure rights of LDC countries, said Rahman. Dispute resolution body of WTO is currently inactive and we should raise our vice together to make it functional, he added.

“Enjoying duty-free market access after LDC graduation will be a big challenge for Bangladesh. So, we have to seek a 12-year extension,” said Mostafa Abid Khan, a former member of Bangladesh Trade and Tariff Commission.

“We have placed our demands to WTO as a LDC graduating country in different clause. We demanded a 12-year extension for special preferential treatment last year. But it did not get pace,” said Md Hafizur Rahman, Director General of WTO Cell under Commerce Ministry.

“We want to get graduating LDC benefits as we are facing many challenges in the graduation stage. After graduation, Bangladesh will face tough competition in global markets,” said CPD Chairman Rehman Sobhan.

Citing the example of Sri Lanka and Pakistan’s experience during graduation, Rehman said we have to place our demands before WTO and take preparation to avert suffering.

“The LDC group has made a submission to WTO for extending the timeline for 12 years. A consensus on this proposal will not only help us to sustain the growth momentum but also be crucial to build internal capacity,” said Faruque Hassan, President of BGMEA.

Trade competitiveness is going to be crucial in the upcoming days, especially for graduating LDCs like Bangladesh. “We have to make use of support programmes like UNCDF, LDCF, UN technology bank for LDCs etc. We need to make most use of these options.”

Along with exploring potential and emerging markets, in the upcoming days, Bangladesh will have to focus on intra-regional trade bloc. We have to work on our internal capacity building as far as trade negotiation and economic diplomacy is concerned, he added.

Home preparation

“After LDC graduation, policy flexibility would not remain for Bangladesh, while the terms of market access will witness a massive change. We have to go through give and take system in availing trade benefits from others, said Rahman.

Bangladesh has to think about its interest and capacity in negotiating trade deals with other countries, he added.

With the new scenario, Bangladesh has to prepare and focus on key areas in its territory.

Gear Bangladesh’s strategies from preference-driven competitiveness to productivity and skills-driven competitiveness and restructure incentives towards technology upgrading and skills formation, the CPD recommended.

Ensure triangulation of trade, investment and transport connectivity with proper logistics and trade facilitation towards strengthening development of regional value chains and production networks to take advantage of the Asian country, said the think-tank.

Put in place a Negotiating Cell, with adequate human and financial resources and backed by the needed analytical capacities, to design Bangladesh’s offensive and defensive interests and conduct the complex negotiations, it added.

Negotiate with trading partners that matter, to get into CEPA type RTAs, with a view to attracting efficiency-seeking FDI, targeting the regional markets, said CPD.