The news headlines story of China awarding duty-free and quota-free (DFQF) market usage of Bangladesh's exports covering 97 % of the tariff lines is without doubt heartening. The trade gain, extended to a range of 5,161 items, came beneath the provisions of the World Trade Organisation (WTO) as integrated at the Hong Kong ministerial declaration in 2005 wherein decision was taken up to facilitate the least designed countries (LDCs) with comprehensive market gain access to by developed countries and also the developing ones. You will find a feeling of gaiety as papers headlined the news headlines as a major breakthrough for Bangladesh's exports - that too at the same time when the country's exports happen to be encountering a slump like in most different countries because of the corona pandemic.
It might be noted that China offered duty-no cost treatment to the LDCs found in July 2010 and Bangladesh has been enjoying the power for 60 per cent of its tariff lines. The new advantage for Bangladesh will come into drive from July 01 and continue before country graduates to a growing country status, slated for 2024. Concurrently, Bangladesh will continue making the most of preferential market access to China beneath the Asia-Pacific Trade Arrangement (APTA) that covers 3,700 tariff line items. Under the newly announced center, Bangladeshi goods will need to ensure value addition of 40 %, while under the APTA the necessity is 35 %. A senior commerce ministry official has got been reported as saying that the 97 % tariff lines without duty and quota will cover most export products of Bangladesh except some medicines, maize and some agricultural goods. The apex chamber of the united states FBCCI offers hailed the Chinese approach.
China is the major trading spouse of Bangladesh with an total annual bilateral trade outlay of more than $13 billion. In the fiscal yr 2018-19, Bangladesh imported goods value $12 billion from China as against less than $1.0 billion worth of exports. The yawning trade gap, reducing which is a daunting task, is predominantly as a result of the country's overpowering reliance on Chinese imports for a variety of principal, intermediate and finished goods. Hence, leaving aside the issue of lowering the trade gap - which given the conditions isn't necessarily bad - the main thing here is if the DFQF would support significantly rise Bangladesh's exports to China. It is here that concerned quarters have to examine the tariff lines carefully to see if the newly announced scheme addresses all potential and prospective products including those under many apparel categories.
It may not end up being out of place here to say that DFQF is no blank cheque for unhindered industry access, as exporting is not only about duty and quota. There happen to be other factors to it - like non-tariff methods (NTMs), compliance needs, and a lot more than anything, fulfilment of benefit addition necessity. For Bangladeshi exporters fulfilling 40 % value addition could be a major problem, since it has already been experienced in value of many primary goods such as for example vegetables, fishes and ocean foods. It could be really rewarding for the country's exports if the authorities have up the problem of relaxing the value addition requirement in future trade talks with their Chinese counterparts.