Home / CPD in the Media / Professor Mustafizur Rahman and Dr Debapriya Bhattacharya on Bangladesh’s transit for India, fees and WTO rules

Professor Mustafizur Rahman and Dr Debapriya Bhattacharya on Bangladesh’s transit for India, fees and WTO rules

Published in New Age on Monday, 15 June 2015.

Tariff Commission proposals shelved
Govt may follow WTO rules for India transit

Shakhawat Hossain

Bangladesh is likely to follow the rules of the World Trade Organisation instead of the proposals of a national committee formed almost half a decade ago to fix fees for transit facility to India.

Finance minister AMA Muhith gave the hint while talking to reporters after a meeting with French ambassador Sophie Aubert at his secretariat office.

The government formed the committee under the Tariff Commission after Dhaka came under pressure from New Delhi to allow it transit facility in 2010.

The committee submitted a report with proposed transit fees for different routes, but those were not made public.

It was reported quoting committee chief and the then Tariff Commission chairman Mujibur Rahman that Bangladesh should charge its neighbour between $4 and $50 per tonne of goods in transit fees depending on routes chosen by the user.

The proposal was made on the basis of reports of five sub-committees on transit route, charge, volume of traffic, investment and benefit.

However, prime minister Sheikh Hasina’s economic adviser Mashiur Rahman opposed imposition of transit fees in line with the suggestions of the Tariff Commission committee.

Muhith said the principle of the Tariff Commission was alright but its calculations absurd.

He said the WTO rules stipulated transit fees analysing the costs for infrastructure and fees fixed by the transit-giving country.

But economist Debapriya Bhattacharya gave a different view saying there was no precedence that a country compelled another to provide transit facility through WTO Dispute Settlement Panel to secure the service.

The lone case of Colombia-Panama was more about enlarging the points of entry, he said.

Incidentally, Article V does not provide an explicit definition of the term ‘freedom of transit’, although it appears trans-shipment comes under its purview, added the former ambassador of Bangladesh to the WTO and currently a distinguished fellow at the Centre for Policy Dialogue.

He said it would be difficult for Bangladesh to protect its interests if it selectively referred to WTO provisions on freedom of transit without full understanding of the fees that a country should charge to cover the costs of providing the transit facility.

New Delhi renewed pressure on Dhaka for the transit facility during Indian prime minister Nerenda Modi’s visit here last week.

India has long pressed for transit and transshipment facilities through Bangladesh to establish easier communication with its northeastern states.

Muhith said the two countries had reached agreements on transit during Modi’s visit. Now negotiations are under way to ‘finalise’ them, he said.

CPD executive director Mustafizur Rahman said that there were some overenthusiastic policymakers who were against the introduction of service charges citing examples of other countries.

CPD reviewed many laws in this connection and found that service charges were applicable. The country should impose service charges on transshipment and transit facilities to India, he said.

Even India never refused to pay the charges for using the country’s infrastructures, he said.

He said the government should review the Tariff Commission committee report to fix the transit fees.


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