Home ›› 19 Jun 2022 ›› Opinion
In today’s world, the least developed and developing countries face hurdles regarding their international trade. The world’s prestigious economies seldom show due respect while negotiating with them about seeking trade facilities. Because of the often unfriendly attitude shown by high-income countries, the LDCs joined the World Trade Organization (WTO).
The WTO ensures discipline in the arena of international trade. There are many reasons behind forming the WTO. Eliminating economic disparity between the poor and the prosperous economies is one of the core objectives of the organisation. Besides, the WTO works as a forum to resolve trade-related disputes worldwide. WTO is actually the modern form of the former GATT (General Agreement on Tariff and Trade). The WTO, widely known as the world’s highest decision-making body in trade issues, was created on January 1, 1995, through Uruguay Round negotiations (1986-94). Since its inception, the WTO has been trying its level best to lead its members in very efficient ways. The WTO has over 160 members representing 98 per cent of world trade.
Undoubtedly, the World Trade Organization came as a blessing for least developed countries (LDCs). Since the formation of the WTO the LDCs had been enjoying lots of facilities related to trade and commerce done internationally. The WTO, the world’s highest decision-making body on trade issues, sets rules and guidelines for LDCs for trade facilitation. The numerous facilities provided by WTO are likely to be withdrawn following the LDC graduation issue. The countries, including Bangladesh, which are now under the LDCs category, will be deprived of the facilities. The delegation from the Bangladesh side in any gathering wants to sit with the key persons of the WTO to extend tenure for enjoying existing preferential trade treatment even after the LDC graduation era.
Enormous challenges have to be faced by Bangladesh in the absence of facilities provided by the WTO. Trade related prime facilities like Duty-Free Quota-Free (DFQF) market access and flexibilities will no more be present. In respect of trade policy, Bangladesh was praised by the WTO members. National Industrial Policy 2016, and Export Policy 2018-21 brought huge appreciation from the WTO authorities. As a member of the WTO, Bangladesh has been able to show better performances in terms of trade share worldwide. According to the World Trade Organization (WTO) statistics in 2020, Bangladesh remained the second-largest clothing exporter in the world with a share of 6.8 per cent. The world’s second-biggest economy, China’s share was 30.8 per cent, Vietnam’s about 6.2 per cent and India’s 3.5 per cent.
Bangladesh’s economy has benefitted a lot because of its WTO membership. A study by a global think tank said that Bangladesh’s GDP was boosted by $ 1759.73 million in 25 years due to WTO membership.
Around 2.47 per cent of Bangladesh’s GDP was gained due to access to the WTO. It is important to note that WTO members’ exports increased an average of 14 per cent between 1980 and 2016 where export of Bangladesh was estimated at $ 3539 million during the period. During the same period, Bangladesh saw around 13 per cent increase in export.
The World Trade Organization recently organized the 12th Ministerial Conference in person held in Geneva. The last meeting took place four and a half years back in December 2017. The trade ministers and relevant officials from member countries took part in the conference in person with high expectations. The meeting of the topmost decision-making body of the multilateral trade-rule-making organization focused on trade challenges due to the Covid-19 attack. Bangladesh participated in the four-day meeting, which was later extended by one day. Bangladesh’s expectations from the meeting were enormous ahead of the post-LDC graduation in 2026. The delegation from Bangladesh was trying to draw attention to the WTO management to seek extension of trade facilities. Bangladesh is set to pass hard times if Duty-Free Quota-Free ( DFQF) market access is lifted, centring on the graduation issue.
Bangladesh and some other LDCs will graduate as developing countries in 2026, approved by the United Nations. Currently, a total of 19 (nineteen) WTO members, including Bangladesh, are in a queue to achieve the status of developing countries within four to eight years.
After graduating as a developing country in 2026, Bangladesh will likely lose 26 types of benefits. The benefits are tariff preferences, subsidies, and privileges in disputes settlements, among others. According to the director-general of WTO cell under the commerce ministry in Bangladesh, the concept of graduating LDC has been included in the WTO list in the just concluded ministerial meeting. It can be said that Bangladesh is hopeful about WTO management level decision that would be taken on special countrywide assessment. As a founding member of the WTO, Bangladesh has the right to enjoy trade benefits provided by the WTO. Currently, waiver on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and time extension issues for availing trade benefits have become essential demands to the WTO. Besides, the subsidy issue on fishing is a long-pending issue that needs to be resolved as soon as possible for the greater interest of Bangladesh. On a positive note the World Trade Organization concluded hard-won deals Friday on fishing subsidies, food insecurity and Covid-19 vaccines in a landmark bundle of agreements secured through hectic round-the-clock talks.
The WTO’s role in fetching export earnings can’t be overestimated. If trade benefits are stopped or reduced by the WTO, Bangladesh may fall into great trouble in the days to come. Considering the estimation of economic loss for LDC graduation, there is no alternative but to negotiate with the World Trade Organization authorities.
Md Mazadul Hoque is an economic affairs analyst. He can be contacted at: mazadul1985@gmail.com
