Vol. 5 Num 568 Sat. December 31, 2005  

New WTO Declaration
US can deny 90pc Bangladesh goods duty-free access

The United States will be able to deny duty-free access of 85-90 percent Bangladeshi export items under the declaration adopted at the recently held WTO Ministerial Conference in Hong Kong, according to a study.

If all products of eight-digit tariff lines of the US Harmonised Tariff Schedule are taken into account, the US will be able to deny duty-free access for products under 339 tariff lines as against the products of 412 tariff lines currently being exported by Bangladesh to its market, said the study released by Unnayan Onneshan, a local think tank.

Analysing the recent export trends to the US market, it explained if the tariff line of less than eight-digit is considered, the number of tariff lines under protection will come down, but the range of product coverage will widen.

"Although the EU and Canada had already given duty- and quota-free market access of Bangladeshi products, a chunk of its exports was not able to avail the facility due to EU's stringent rules of origin," said Rashed Al Mahmud Titumir of Unnayan Onneshan, releasing the report yesterday.

The report said in every year since 2001, over 60 percent of the total exports from Bangladesh to the US faced tariff peaks, or tariff of 15 percent and above.

Given the scenario, Bangladesh would not benefit much from the availed duty- and quota-free market access provided in the WTO declaration, as its exports concentrated mainly on few products and very limited number of destinations, the report added.

"Apprehension is that many of the products under different tariff lines, in which Bangladesh has export interests might be excluded from the duty- and quota-free market access - at least the US proclamation portends of such apprehension," said Titumir, a former WTO consultant to the commerce ministry.

"Bangladesh could reap some benefit if it is capable enough to bargain with her bilateral counterparts to avail such facilities for some of the products, if not all, in which it has particular export interests."

On an average, around 105 Bangladeshi products faced tariff peaks based on the data of the four-year period.

The Unnayan Onneshan analysis showed that bulk of the exports faced tariffs between the range of 15 and 20. On the other hand, share of exports that faced tariff range between 25 and above had also been increasing over the years, implying that products that Bangladesh has comparative advantages face higher tariff in the US market, it said.

In the US market, the average import duty on Bangladeshi products was 15.85 percent.

However, shares of that few products that faced tariff peaks were much higher than the shares of products that faced tariff less than 15 percent. This implies that the three percent exclusion is enough to choke main export items of Bangladesh, the study said.