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Dr Debapriya Bhattacharya on transit

The Article V of the WTO did not provide an explicit definition of the term ‘freedom of transit’

Published in New Age on Wednesday, 16 September 2015.

Dhaka likely to relent on transit fee rates

Shakhawat Hossain

Dhaka, bowing down to the pressure of Delhi, is likely to reduce the proposed rate of transit and transshipment fees which would be imposed for allowing Indian goods to pass through the country’s territory.

Shipping ministry officials said Dhaka might also relax the provision for 100 per cent bank guarantee for allowing the transit and transshipment facilities.

They said an inter-ministerial meeting was scheduled on Wednesday to review alternative proposals by the ministries and divisions, especially that of National Board of Revenue.

The NBR has proposed to fix the fee at Tk 580, approximately equivalent to $7 per tonne of Indian good for allowing custom clearance. It also asked the government to impose 100 per cent bank guarantee.

Shipping minister Shajahan Khan will chair the meeting at his secretariat office.

Prime Minister Sheikh Hasina’s economic adviser Mashiur Rahman, who opposed Tk 10,000 per 20 feet container and Tk 1,000 per tonne of cargo on trucks proposed by NBR in 2011, will attend the meeting.

Shipping secretary Shafique Alam Mehedi said technical committees of both the countries decided to negotiate the transit and transshipment related fees afresh after Indian prime minister Narendra Modi’s visit in the capital in May.

He said the inter-ministerial meeting would review the overall situation.

India has been pressing Bangladesh for long to provide it transit and transshipment facilities for easier movement of goods between its northeastern provinces and its mainland.

Bangladesh provided transshipment facilities to India on several occasions on humanitarian grounds for the transportation of food-grains and large power plant equipment to north-eastern Indian provinces.

Delhi’s response has always been cold whenever the question of payment of duties and fees for transit and transshipment were raised.

In recent days India changed its stance and agreed to pay the fees according to World Trade Organization rules, said finance minister AMA Muhith.

The WTO rules stipulate payment of transit fees on the basis of cost of infrastructure plus the charges fixed by the country providing the transit facilities.

Economist Debapriya Bhattacharya said that it would be difficult for Bangladesh to protect its interests by following the WTO provisions.

The Article V of the WTO did not provide an explicit definition of the term ‘freedom of transit’, he said.

A World Bank-United Nations report on Landlocked Developing Countries of November 2014 says that $2 to $3 is charged by East and Southern African as trucking fee per km.

It says that higher fees are charged by Western and Central African countries from neighbouring land-locked Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe.

Transit of goods occurs between Turkey and Iran on the basis of a bilateral agreement signed in 1994.

Under the agreement, an Iranian truck passing from Turkey’s eastern customs gate to its western customs gate after crossing roughly 1,200 km paid $307 as the transit fee until last year.

Seven European Union countries, including Switzerland, levy ‘vignettes’, fees from users of roads for a particular period since 2013.

In April, England began to charge lorries of foreign countries up to $16 per day for using its roads.

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