A comprehensive agreement between Bangladesh and India for agricultural exports could resolve the non-conforming sanitary and phytosanitary measures (SPS) that undermine trade potentials of the two countries.
SPS measures such as laboratory testing, registration, certification and sanitary phytosanitary certificate start to act as non-tariff barriers (NTBs) when appropriate mechanisms and initiatives are not put in place to address the attendant concerns.
The observations emerged from a dialogue on “Non-Tariff Barriers in Bangladesh-India Trade: Addressing Sanitary and Phytosanitary (SPS) Concerns,” organised by CPD at BRAC Inn Auditorium on Saturday, 18 April 2015.
Mr Mahbubur Rahman, President, International Chamber of Commerce, Bangladesh (ICCB) chaired the discussion following introductory remarks from Professor Mustafizur Rahman, Executive Director, CPD.
Press reports on the event
While presenting the keynote, CPD Senior Research Associate Ms Khaleda Akhter said that exporters felt that certification and testing related requirements in the Indian market for agricultural and food products create problems for exporters.
The study findings indicated that the attendant concerns include harmonisation of food standards, mutual recognition of conformity assessment, dispute settlement and technical cooperation with transparency etc, according to a CPD perception survey conducted at major India-Bangladesh land ports.
In summary, Professor Rahman observed that exporters need to be aware of the drawbacks, organisations like BSTI and the Agreement on the Establishment of South Asian Regional Standards Organisation (SARSO) will need to undergo institutional capacity building and an SPS agreement should take place within the context of SAFTA to increase exports to India.
Another Discussant Mr Md Tanveer Islam, General Manager-Export, Pran Group, underscored a number of on-the-spot concerns for Bangladeshi exporters, who need to await Central Food Laboratory (CFL) approval to disburse their exportable goods. Specific packaging requirements for India is another hindrance, he said, noting that all food samples need to be sent to Calcutta which is around 400-500 kilometres away as Central Food Laboratory (CFL) facilities are not available near all land ports.
On behalf of CUTS Calcutta Resource Centre that conducted the Indian counterpart of the study, Mr Prithviraj Nath, Policy Analyst and Head, said that the major challenge is the capacity issues and that customs are not trade-aware regarding certification standards. He recommended capacity building measures for major stakeholders including staffs at SARSO.
Addressing as a Distinguished Discussant, Dr Selim Raihan, Executive Director, SANEM mentioned that Bangladesh export to India has declined despite reduced tariffs and DF-QF facilities to Bangladesh. As many of these issues are related to trade facilitation, increasing the producers’ capacity to meet compliance and standards and mutually beneficial cooperation between the two countries should improve the condition.
Chief Guest Mr Amitava Chakraborty, Director General (WTO Cell), Ministry of Commerce observed that Bangladesh’s export to India is not expanding significantly and this is mainly due to the lack of capacity building of the exporters. The second impediment is absence of institutional strengthening and the third – lack of product diversification for the export destinations.
Mr Chakraborty underscored that Bangladesh needs to particularly go for institutional capacity building because India is a very important trade partner and trade enhancement is essential for Bangladesh to achieve a middle-income status as envisaged in the Vision 2020.
Dr Mostafa Abid Khan, Director, Programme, Research and Policy Advocacy, Bangladesh Foreign Trade Institute (BFTI), agreed that a bilateral agreement would not be a viable solution because problems arise from outdated regulations in the trade policies, implementation of import policies in Bangladesh and Countervailing duties (CVDs) which are trade import duties imposed under WTO rules to neutralise the negative effects of subsidies.
Dr Md Mozibur Rahman, Former Chief Executive Officer, Bangladesh Foreign Trade Institute (BFTI) opined that there is no universal standards for food and agro trade items. The problems may continue to exist without a mutually agreeable standard and the persistent trade-related complications at the border.
In this regard, Mr Md. Mahbubur Rahman, Deputy Director, Bangladesh Accreditation Board (BAB), said that any certification issued by the BAB should be accepted in all countries. In reality, the Indian customs is not accepting other accredited laboratory certificates other than from India. The governments should settle these issues.
On a positive note, Ms Ferdaus Ara Begum, CEO, BUILD Project, Dhaka Chamber of Commerce and Industry (DCCI) informed that some time-bound action plans have been taken regarding quarantine and phytosanitary certification issues at a recent meeting of BUILD with the Prime Minister’s Office (PMO).
Among other recommendatins, Mr Zillul Hye Razi, Trade Advisor, European Union Delegation to Bangladesh suggested for efficient administrative system to maintain the hygiene and quality of perishable agro goods for export.
The Export Promotion Bureau (EPB) should educate the exporters regarding certificaiton and compliance issues, opined Mr Jahangir Bin Alam, Secretary & CEO, India-Bangladesh Chamber of Commerce and Industry (IBCCI).
Mr M Anis Ud Dowla, Former President, MCCI, urged the government to take required measures to improve the Bangladesh Standadrds and Testing Institute (BSTI) which must not be reliant on any assistance from the Indian government.
Mr Farooq Ahmed, Secretary General of BEF and MCCI, said that the macro issues such as certification, laboratory issues has remained the same for decades but some micro issues have improved. He, however, felt that policy recommendations have very little impact on the ground-level realities.
Guest of Honour Mr Humayun Rashid, Acting President and Senior Vice-President, DCCI, informed that DCCI is involved in changing conflicting policies and looks forward to positive developments.
At the floor discussion, valuable remarks came from Dr Syed Humayun Kabir, Director General, South Asian Regional Standards Organisation (SARSO); Mr Suhel Ahmed Choudhury, Former Commerce Secretary; Mr Golam Md Sarwar, Assistant Director (Agriculture & Food), Bangladesh Standards and Testing Institution (BSTI) among others.