CPD Working Paper 51
NAMA Negotiations in the WTO and Preference Erosion
Concerns of Bangladesh and Other Regional LDCs
This paper attempts to make an estimate about the range of preferential erosion for Bangladesh given her current trade pattern and preferential treatment enjoyed by her exports. The paper finds that for Bangladesh, the preferential erosion could be substantial (e.g. USD 42.1 million worth of net preference erosion in the EU alone for RMG products under one of the possible scenarios). Reduced preference margin will also undermine future competitiveness in the developed country markets. It is also to be noted that tariff reductions under NAMA will have positive implications for Bangladesh in the US market, and thus, may increase Bangladesh’s competitive edge vis-à-vis Caribbean and Sub-Sahara African countries. The paper reviews some of the proposals that are being discussed to address the possible negative consequences of preference erosion for the LDCs.
Contributors: Mustafizur Rahman and Wasel Bin Shadat
Publication Period: September 2005