LDC graduation assessment could be delayed
Bangladesh may continue steadily to receive duty-free rewards on exports to developed and developing countries for longer than expected as the US Centre for Development Coverage (UN CDP) could delay the country's assessment for graduation from a good least developed country (LDC) by 3 to 5 years.
The UN CDP was scheduled to evaluate particular LCDs, including Bangladesh, for promotion to the growing country category in 2021.
"However, the assessment could now be delayed by 3 to 5 years in factor of the global monetary losses caused by the ongoing coronavirus fallout," Mustafizur Rahman, a good distinguished fellow of the Centre for Insurance plan Dialogue (CPD), explained yesterday.
The assessment could now be completed in 2024, however, if this isn't feasible for any reason, then the UN CDP may consider alternative measures, a few of which have already been proposed by LDCs in light of Covid-19, he added.
One particular alternative is that the UN CDP will carry out assessments in 2021 as initially planned and invite qualifying countries to complete their graduation as scheduled.
The main element difference though is that developing and created countries will be asked to keep to supply zero-duty benefits for the recently graduated countries for yet another five years, Rahman said.
"The UN CDP is considering both options," he added.
However, Rahman urged local suppliers to brace for the 12 % export duty they will face when shipping goods to the EU once the country completes its graduation.
Already, Vietnam possesses signed a free trade agreement (FTA) with the EU, Bangladesh's primary export destination.
If Vietnam enjoys such benefits while Bangladesh pays a 12 % duty for goods bound for the EU, then the country's competitiveness will fall significantly, said Rahman.
Therefore, Bangladesh must sign several In depth Economic Partnership Agreements (CEPA) with certain countries and regions for preferential trade rewards since FTAs alone do not cover all incentives.
For instance, FTAs only cover tax privileges as the CEPA covers all duty, investment and domestic market-related benefits.
The CPD economist also suggested that Bangladesh further penetrate the Association of South East Asian Countries (Asean) markets in a bid to boost the country's exports, adding that exporters should search for new business opportunities in India, China, Japan and other key Asian economies.
Reducing lead time can be a very important task intended for businesses in Bangladesh because export earnings have been upon the delice seeing that even prior to the Covid-19 outbreak, Rahman said.
This is a concerning fact and it needs to be known why exports witnessed a downward trend between your July-March period of the prior fiscal year.
Besides, certain products like jute goods, footwear and pharmaceuticals performed well in fiscal 2019-20.
"So, we also need to learn why these things did well in order that we are able to export more of these items," Rahman added.
He made these comments while speaking at the 5th dialogue of Resurgent Bangladesh, a virtual meeting on 'International Trade in Covid Occasions: Impact and Way frontward for Bangladesh', organised by the Dhaka Chamber of Commerce and Industry (DCCI).
Various lawmakers, exporters, businesspersons, trade body representatives, economists and researchers participated in the meeting.
Resurgent Bangladesh is an economical recovery initiative organised by the Metropolitan Chamber of Commerce & Sector (MCCI), DCCI, Chittagong STOCK MARKET Ltd, Organization Initiative Leading Advancement (BUILD), and Policy Exchange.
As the country's bright image is a crucial aspect for attaining higher export growth, addressing the public medical issues currently prevalent in the country is more crucial, said Syed Nasim Manzur, managing director of Apex Footwear.
Manzur as well urged the authorities to lessen both cost and simple doing business in Bangladesh.
"Creating more demand in the domestic market is vital aswell," he said, adding that almost all of the roughly 11 million people utilized by the country's wholesale, retail and tourism sectors are financially suffering as a result of ongoing pandemic.
Abul Kasem Khan, chairperson of BUILD, suggested that Bangladeshi suppliers should utilize the export potential of China as the Chinese federal government offered duty-free of charge benefits for 8,256 locally made products.
The Asean market is vital for Bangladesh, he said, adding that Bangladesh includes a strong claim for entering the intergovernmental organisation as the country has already sheltered more than one million Rohingya people.
While moderating the conference, DCCI President Shams Mahmud said many international retailers want to change their orders and investments from China, which is a major opportunity for Bangladesh.
Mahmud said that the authorities should negotiate with the leaders of various export destinations to avoid any restrictions on products while production of the country's port infrastructure, such as for example container terminals and Bay terminal, has to be expedited.
He also urged the federal government to accelerate the procedure to secure an Asean observer status.
Mahmud continued to call after the concerned authorities to address the problems of the para-tariff and non-tariff barriers with India and other Saarc countries.
Nihad Kabir, president of MCCI, suggested positioning periodic discussions between businessmen and the prime minister so that major trade barriers could be effectively removed.
There are other issues though, including the automation of the National Board of Revenue, which have been hanging for over ten years despite the fact that these initiatives were taken considerably earlier, she said.
M Masrur Reaz, chairman of Plan Exchange, said that Bangladesh should think about the potential of japan industry alongside the Chinese 1 as well.
Asif Ibrahim, chairman of the Chittagong STOCK MARKET, said capital ought to be taken from the stock market instead of banks.
The government should disburse export incentives in the proper sectors as export-oriented industries could create more jobs in the domestic marketplaces, said Zaidi Sattar, chairman of the Policy Research Institute.
Humayun Rashid, managing director of Energypac Group, said prospects have been created found in the Indian industry for transformer manufacturers. His firm has been exporting an excellent quantity of electrical transformers to India during the last two years.
Meanwhile, Tofail Ahmed, chairman of the parliamentary standing committee in the ministry of commerce, said Bangladesh may potentially export $2.5 billion in goods to China because of the market's zero-duty benefit on numerous Bangladeshi goods.
Bangladesh has enjoyed such benefits beneath the LDC criteria, however, the government has been slow found in signing FTAs with other countries, he said.
