TRALAC - Trade Law Centre

Perspectives from Bangladesh on the proposed US trade legislation

Saturday, 20 March 2010

Source: The Financial Express (Bangladesh)

The New Partnership for Trade Development Act (NPTDA), 2009 would help Bangladesh to boost its exports to the USA if appropriate measures and careful strategies are undertaken, observes an expert committee commissioned by the government.

The committee, which has submitted its report to the Ministry of Commerce (MoC) last week, has put forward 12-point suggestions tothe government to reap the maximum possible benefit out of the NPTDA Bill.

The Public-Private seven-member committee was formed in December 2009 headed by Professor Mustafizur Rahman, Executive Director, Centre for Policy Dialogue, a private sector think tank.

Senator Mc Dermott introduced the bill in the US House of Representatives in November last year to offer improved duty-free facilities to 15 least developed countries (LDCs), including Bangladesh.

The bill proposes for duty-free and quota-free market access for non-AGOA (African Growth and Opportunity Act) LDCs and outlines simplification of existing US-GSP rules of origin.

A total of 34 Sub-Saharan African countries were granted duty and quota free market access to the US in October 2000 under the AGOA.

The bill proposes application of an adjustment rule for duty-free import of certain categories of apparel articles. Besides, the LDCs concerned will qualify for 10 per cent point increase each year for the purpose of duty-free treatment for fiscal years after 2010.

The report said, the bill once passed would potentially provide Bangladesh significant competitive edge and stimulate foreign direct investment flow in the country and increase domestic investment targeting the US market.

In the past, many of the AGOA beneficiaries, including Sub-Saharan African LDCs, had opposed inclusion of Asia Pacific LDCs such as Bangladesh and Cambodia whenever a review of market access was undertaken, the report noted.

Imports from Bangladesh by the USA in 2009 were above $4.0 billion, of which 90 per cent was apparel. Only about one per cent of these exports enjoyed duty-free preferential access under the existing US-GSP scheme. The average duty rate for the remaining 99 per cent was 15.2 per cent, sources in the Export Promotion Bureau said.

The committee advised the government to consider the bill positively and pursue its adoption as it offers higher benefits compared to the status-quo situation.

To maximize the potential benefits, export diversification and strengthening of backward linkages would be crucial, the report suggested.

The committee report underscored the need for a review of the move from AGOA countries and their supporters in Washington to exclude Bangladesh from the list of beneficiaries under the proposed bill.

'Any attempt to exclude Bangladesh from the list of beneficiary countries under the proposed bill ought to be vigorously contested and opposed. Towards this, any attempt to isolate Bangladesh from Cambodia also should be resisted. A communication with Cambodia should be established to have her on the side of Bangladesh,' suggested the report strongly.

The report recommends engaging lobbyist firms in the US to pursue the passage of the bill.