Press report on the media briefing on “Bali Outcome of the WTO: What it Means for Bangladesh,” at the CPD office on Monday, 9 December 2013.
Published in The Daily Star Business
WTO’s Bali package: a mixed bag
Bangladesh to gain from trade facilitation; duty privileges are still without legally binding commitment: CPD
Star Business Report
The country stands to gain considerably from the ‘Bali package’ struck at the ninth WTO ministerial meet in Bali on Saturday if it acts judiciously, the Centre for Policy Dialogue (CPD) said yesterday.
The keystone of the agreement, the first in the group’s 18-year history, is trade facilitation, which stipulates that measures will be taken to cut red tape and streamline customs and port procedures to ease the movement of goods through national frontiers.
“Trade facilitation is important for the country as it will reduce the cost of trading in Bangladesh,” the private think-tank said in its assessment of the landmark WTO deal in context to Bangladesh.
CPD’s Research Director Fahmida Khatun shared the findings of the study yesterday with reporters at the think-tank’s headquarters in the capital.
Bangladesh as a least-developed country (LDC) is entitled to both technical and financial support to implement the feature, and CPD said the country could do well by taking the opportunity to enhance its infrastructure and incorporate modern customs systems and behaviour.
As part of the LDC package, one of the three pillars of the historic deal, Bangladesh is allowed preferential access to richer countries’ services markets. A high-level meeting is scheduled in 2014 to decide on how to go about this feature.
Khatun said it is a “good opportunity” for the country to increase its export of semi-skilled and skilled manpower, but much homework is needed to identify the sectors and countries to export.
Other than presenting the sectors and modes for potential exports, the country should press for elimination of non-tariff barriers such as ‘economic needs test’ at the meeting next year.
“Bangladesh needs financial and technical support to strengthen its domestic support capacities to take advantage of the granted preference,” the report said.
About the much-touted duty-free and quota-free (DF-QF) access of LDC products to developed and developing countries, the CPD is sceptical about the efficacy of the feature.
The ninth ministerial conference outcome document states that developed country members that do not yet provide DF-QF market access for at least 97 percent of products originating from LDCs shall seek to improve their coverage before the next ministerial meet.
The CPD noted that there is no specific timeframe and legally-binding commitments. More importantly, garment, the country’s main export item, is on the ’3 percent exclusion list’ of the US, the country’s single largest export destination.
“Unless the obligation is legally binding with concrete timeframe Bangladesh will not receive any additional benefit,” the report said.
Mustafizur Rahman, executive director of CPD, said the country “has to hammer to make it a meaningful market access”, adding that tariffs are fast falling fast, so the benefits of DFQF are eroding rapidly.
About the limitless public stockholding by developing countries for food security championed by India, the think-tank said it could raise food prices regionally, which could affect Bangladeshi consumers.
“High stock piles when needed may be dumped in the international market. This could have a dampening effect on global food prices. Food exporting countries may be out priced. But Bangladesh not being a net food importing country may stand to gain from it,” the report said.
Withdrawing cotton subsidies may have pushed its prices up in the international market and Bangladesh as a consumer of the product would be affected. “All importing nations of cotton will be affected,” said Khandoker Golam Moazzem, additional research director of CPD.
Published in Dhaka Tribune
WTO Trade deal: Package needs to be legally binding
Tribune Report
‘The accord produces no new gains for Bangladesh as it is hardly going to make any difference for the least developed countries.’ says Professor Mustafizur Rahman
The Bali package falls short of specific time frame and legally binding commitments on duty free and quota free market accesses to the developed countries, particularly USA, says trade analysts yesterday.
Through duty free quote free (DFQF) treatment for all goods originating from all least developed countries (LDCs) was a key demand of the LDCs during the Doha round negotiations that began in 2001 in Qatar.
“The accord produces no new gains for Bangladesh as it is hardly going to make any difference for the least developed countries,” said Professor Mustafizur Rahman, executive director of Center for Policy Dialogue (CPD) at a press briefing in the city.
He said there are no specific timeframe and legally binding commitments to execute. “Unless the obligation is legally binding with concrete time frame Bangladesh will not receive any additional benefit as its major export item RMG is on the 3% exclusion list of the USA.”
The World Trade Organisation’s Bali meeting that ended on December 6 decided that developed country members that do not yet provide DF-QF market access for at least 97% of produces originating from LDCs shall seek to improve their existing DF-QF coverage to provide increasingly greater market access to LDCs, prior to next ministerial meeting.
Professor Rahman said the WTO meeting is important for Bangladesh, as 50% of its total GDP is caught up with the global trade.
“Negotiators now have to find a long-term solution to change the rules that stand in the way of getting market access of poor countries to the developed countries, like USA,” he said.
About the WTO meeting in Bali, he said the consensus among the member countries was reached on some issues, including food security and cotton; otherwise it raises question of its existence.
The draft deal, unveiled in Bali, Indonesia, was the first multilateral agreement negotiated by the WTO’s 159 member nations. The deal was made on the three areas based on negotiations in Geneva are trade facilitation, agriculture $ cotton and development issues.
Bali meeting offered a trade facilitation pact to make trade easier, faster and cheaper by smoothing customs procedures and reducing red tape around the world.
“Implementation of trade facilitation measures will help reduce cost of trading in Bangladesh. However, Bangladesh will need both technical and financial support towards this,” said Fahmida Khatun, a CPD research director, in its presentation paper.
She said LDCs have been asked to identify where they need the support. “Bangladesh has to make infrastructural real development and practice modern customs systems and behaviour in order to access the full merit of Bali outcome on trade foliation.”
The deal reached in Bali lets India and other developing nations continue to subsidize their crops to bolster food security without having to worry about legal challenges, so long as the practice doesn’t distort international trade, according to a draft text. However, the proposed solution is interim until they reached for a permanent one.
Fahmida said this will allow India to stock foods, which could raise food prices regionally which could adversely affect Bangladesh consumers during food crisis.
“Stockpiling of food could result in ban on export of food, which may have adverse impact for Bangladesh,” she said referring 2008 when the world fell in food crisis.
On cotton issues, the WTO meeting proposed to continue to discuss considering all forms of export subsidies for cotton and all export measures with equivalent effect.
“If export subsidies on cotton are withdrawn as a cotton imprinting country, Bangladesh will have to import cotton at a higher price. This could increase the cost of production of RMG,” said CPD research director.
As to operatnisation of the services waiver, the WTO decided that a high level meeting will be organized in 2014 to deal with operanilsation of the services waiver for LDCs, which will allow for preferential market accesses to LDC services and service supplies in the developed country markets.
Fahmida said Bangladesh will fail to enjoy the facility unless trade barriers like non-tariff are eliminated. “Bangladesh needs to increase exports of its semi-skilled and skilled manpower related to the apparel sector, construction, care industry and education sector.”
Published in The Financial Express
Bali WTO meet outcome may prove beneficial to BD: CPD
FE Report
The Centre for Policy Dialogue (CPD) said on Monday that although most of the country’s interests remained directly unresolved, the WTO agreement sealed at the Bali ministerial meeting paved the way for various opportunities for Bangladesh.
“If a rule-based agreement is not in place, many regional groups would dictate smaller countries which might not prove helpful for Bangladesh,” Prof Mustafizur Rahman, Executive Director of CPD, said at a media briefing held on the outcome of the Bali ministerial meeting of World Trade Organisation (WTO).
The country should now find out its opportunities and prepare itself by conducting research on further negotiations, Prof Rahman suggested.
He said the Bali Ministerial proceeded with a small package of issues pulled from the broader Doha agenda that included market access, tariff reduction in agriculture and manufactured goods, rules of origin, trade in services, trade related intellectual properties, special and differential treatment.
The country needs to prepare itself for identifying the areas including technical and financial support to implement trade facilitation provision, identify sectors and modes for export of services along with active participation in reviewing and functioning of the monitoring mechanism, he said.
“The duty-free and quota-free (DF and QF) issues are very important for Bangladesh. However, there is no specific timeframe and legally binding commitments. Unless the obligation is legally binding with specific timeframe, Bangladesh will not receive any additional benefit as its major export item RMG is on the ‘3 per cent exclusion list’ of the USA.” Dr. Fahmida Khatun, Research Director of CPD said.
In order to make preferential rules of origin LDC-friendly, the domestic value addition requirement criteria should be defined in a manner that takes cognizance of domestic supply-side and productive capacity of the LDCs, she added.
The ministerial meet’s outcome shows that the WTO would operationalise service waiver for the LDCs, which would allow preferential market access to LDC service and supplies in the developed countries’ markets.
“A good number of opportunities have been opened for Bangladesh allowing it to increase export of semi-skilled and skilled manpower in garment, construction and education sectors and caring industry. Bangladesh needs to identify its sectors and modes of choice for potential export and present those at the proposed ‘high-level meeting’ in 2014,” Dr Fahmida said.
The CPD Research Director said the trade facilitation was the centre-piece of the Bali package which aimed at simplifying the customs procedure by reducing costs and improving speed and efficiencies in order to boost commerce.
“Implementation of the trade facilitation measures will help reduce cost of trading in Bangladesh. However, the country will need both technical and financial support towards this,” she noted, adding Bangladesh needed to examine where particularly it required the support.
About possible withdrawal of cotton subsidies, Dr Fahmida said if export subsidies were withdrawn, the cotton-importing country Bangladesh would have to import the item at a higher price, which could increase the ready-made garment (RMG) cost and the product would lose competitiveness.
On development and LDC issues, Dr Fahmida said a monitoring mechanism under WTO would review all the aspects of implementation of the special and differential provision, which would ultimately provide opportunities for Bangladesh to raise the issues under it (the provision).
Published in New Age
CPD doubts full execution of WTO Bali package
Staff Correspondent
The Centre for Policy Dialogue on Monday expressed doubt on full implementation of the Bali Package that members of the World Trade Organisation agreed in Indonesia on Saturday as the agreement has no specific timeframe for implementation.
At a press conference on ‘Bali outcome of the WTO and what it means for Bangladesh’, the leading independent think-tank said though developed countries agreed to provide duty-free and quota-free facilities to least developed countries in their markets, there is no legally binding commitments and no specific timeframe for implementation.
The accord produces no new gains for Bangladesh as without specific timeframe and legally binding commitments for execution, it is hardly going to make any difference for the least developed countries, said Professor Mustafizur Rahman, CPD executive director, at a press briefing.
Unless the commitment is legally binding with concrete implementation timeframe, Bangladesh will not get any additional benefits from US market as its major exporting product, readymade garment, is on the 3 per cent exclusion list of the USA, he said.
‘Though many of Bangladesh interests have remained unsolved, the conference has created different opportunities for LDCs. Bangladesh should now find out its opportunities and prepare itself for further negotiations for attaining those opportunities from developed countries like USA,’ he said.
The WTO ninth ministerial conference that ended on December 6 in Bali, Indonesia, decided that developed country members do not yet provide
DFQF market access for at least 97 per cent of produces originating from LDCs shall improve existing DFQF coverage to provide increasingly greater market access to LDCs, prior to next ministerial meeting.
About the WTO meeting in Bali, he said the consensus among the member countries was reached on some issues, including food security and cotton; otherwise it will be questionable for its existence.
Bali meeting offered a pact to make trade easier, faster and cheaper by smoothing customs procedures and reducing red tape around the world. The agreement also offered better access for less developed nations to the markets of rich countries.
‘Implementation of trade facilitation measures will help reduce cost of trading in Bangladesh. However, Bangladesh will need both technical and financial support towards this,’ CPD research director Fahmida Khatun said.
In order to make preferential rules of origin LDC-friendly, the domestic value addition requirement criteria should be defined in a manner that takes cognizance of domestic supply-side and productive capacity of the Least developed Countries (LDCs), she said.
She said that there is a good opportunity for Bangladesh to increase export of semi-skilled and skilled manpower for garments sector, construction sector, care industry and education sector.
Bangladesh needs to identify its sectors and modes for potential export in services sector and present it at the proposed ‘high level meeting’ in 2014, Fahmida said.
About possible withdrawal of subsidies on cotton, Fahmida said if export subsidies are withdrawn on cotton importing countries, Bangladesh will have to import cotton at a higher price that could increase the RMG products cost and lose competitiveness.
About LDC issues, she said a monitoring mechanism under WTO will review all aspects of implementation of special and differential provisions which will ultimately provide opportunities for Bangladesh to raise issues under the provision.
Published in The Daily Sun
Govt needs to devise plans to reap due benefits from WTO deal: CPD
Staff Correspondent
Bangladesh will need to devise plans to reap trade benefit from the historic WTO agreement reached at the Bali ministerial conference, Centre for Policy Dialogue (CPD) Monday observed.
That plan should include identifying the areas of technical and financial help for trade facilitation, sectors and modes for export services to gain from service-waiver facility.
At the same time, Bangladesh’s active participation would be needed in reviewing the functioning of the monitoring mechanism under special and differential treatment.
The independent think tank, however, said the Bali conference did not make any significant progress on the issues linked to Bangladesh, even though it was touted as a landmark achievement.
“The issues of Bangladesh’s interest remained the same,” remarked CPD Executive Director Prof Mustafizur Rahman.
For instance, duty-free, quota-free market access for 97 percent LDC products to developed market was agreed in Hong Kong conference, but Bali conference fail to raise the percentage or put in place any legal binding or timeframe for it, the CPD argued.
With the agreement, Prof Rahman said, Bangladesh will be nowhere in a position to discuss with the USA under any WTO framework to include its RMG in the US import list, which is currently excluded from any preference.
The country will need to continue discussions with the member states and push for issues of its own interest at the WTO. Otherwise, big countries will serve their own interests, suggested the CPD boss.
CPD also warned that Bangladesh has to be more cautious about the food security provision that allowed stockpiling of food grains by big food producing countries, which could create problems for Bangladesh in the crisis moments.
Despite being a non-food importing nation, Bangladesh should be vocal at the WTO so that big food-growing nations cannot slap ban on food exports during food crisis in the name of food security.
Also, withdrawal of subsidies on cotton exports could put huge pressure for countries like Bangladesh which heavily depend on cotton imports, says CPD.
The trade-facilitation measures, including infrastructural development and modern customs, Bangladesh reduce cost of trading, but it will need technical and financial support, it added.
Published in News Today
Withdrawal of export subsidy on cotton may affect RMG
If the subsidy for cotton export is withdrawn as per the decision of the WTO Ministerial Conference recently held in Bali, the readymade garment (RMG) sector in Bangladesh may face a hurdle, says Centre for Policy Dialogue (CPD), a civil society think tank, reports UNB.
“If the export subsidy on cotton is withdrawn Bangladesh as a cotton-exporting country will have to import cotton at higher prices. This could increase the cost of production,” CPD research director Dr Fahmida Khatun said.
She was making a power-point presentation on Bali Outcome of the WTO Conference at a press conference at CPD office in the city on Monday.
The 9th WTO Ministerial Conference reaffirmed commitment to the parallel elimination of all forms of export subsidy and discipline on all export measures with equivalent effect as set out in the 2005 Hong Kong Ministerial Declaration addressing distortions in the cotton sector, including the elimination of export subsidy.
Speaking at the press conference, CPD executive director Prof Mustafizur Rahman said elimination of export subsidy on cotton will not only cast a negative impact on Bangladesh, but also all the cotton-importing countries. “It’s now difficult to say how much price of cotton will soar.”
About the outcome of the Bali Conference, he said as per the decision of the meeting, a country can now stock more food grains in the name of considering its domestic demand. “We’ve raised voice at the conference so that no country can ban food export during any emerging food crisis. But we didn’t achieve it,” Prof Mustafizur.
He said the decision taken to stockpile food grains is an interim solution, not a permanent one, but the rice-exporting countries like Thailand and Vietnam now can ban rice export.
The CPD demanded at the WTO meet for raising a fund for the least developed countries (LDCs) for providing more trade facilities.
“A big investment is required in this field.” He said Bangladesh needs to prepare in terms of identifying areas for technical and financial support to implement the trade facility provisions adopted in Bali conference.
About the shielding public stockholding programme, Dr Fahmida Khatun said more procurement by India could trigger food price hike regionally, affecting Bangladeshi consumers.