China has offered zero tariff center to 97 percent of items in the event of import from Bangladesh, while a good strategic moral support desires amid the China-India battle. Nepal in addition has given total support to China.
The world economy is battered by the coronavirus pandemic and the global trade is nearly in a standstill going back five months. Factories are being shut down in the country because of cancellation in investing in orders in the garment sector. Amid such a grim financial situation, Bangladesh’s large trading partner China has supplied a breath of pain relief.
The new announcement should come into influence on July 1 this season. From that day, 8,256 Bangladeshi products will get zero tariff center in the Chinese market.
Bangladeshi manufacturers should be able to avail this duty-free and quota-free facility after 40% benefit addition to these products. Following the decision was permitted by the Chinese federal government on June 16 (Tuesday), the united states notified the Bangladesh federal government about it on Fri through the Bangladesh Large Commission in China.
Stakeholders concerned believe this chance is expected to noticeably raise Bangladesh’s exports to the Chinese industry and attract foreign expense into Bangladesh.
You will find a strong prospect of expanding markets of Bangladeshi pharmaceutical products, readymade garments, frozen food, fish and vegetables in China.
The Bangladesh government expectations the new facility will decrease the expanding trade gap between Bangladesh and China.
Mamun Rashid, joint-secretary to Bangladesh China Chamber of Commerce and Market, told There is a big demand for Bangladeshi traditional products as well as pharmaceutical items found in China which has a population of around 140 crore.
“Bangladesh cannot use that prospect of not having duty-free access to the Chinese industry,” he said, adding, “it all has opened up a new opportunity for Bangladesh.”
According to sources by the Ministry of Commerce, Bangladesh has been making the most of zero tariff facility upon 60 percent of export items to China since July 1, 2010 within Asia Pacific Trade Arrangement (APTA) for LDCs.
However, Bangladesh was not able to benefit much from the opportunity as the center was on less important export items other than the principal exportable components of Bangladesh. The latest center would ensure unimpeded gain access to of Bangladeshi products to the Chinese industry.
Hafizur Rahman, joint-secretary to the commerce ministry and chief of the WTO Cell, told, “There are many products found in Bangladesh which are very good in quality but much cheaper in comparison with those of China. Those items can discover a place in the Chinese market.”
Pointing out that China is preparing to shift a large number of mills and factories to other countries owing to tough compliance requirements and great costs of production, he said Bangladesh could become a potential investment destination designed for China.
The broader access of Bangladeshi products to the Chinese market will help decrease the expanding trade gap between the two countries and in addition will create employment in the united states by attracting extra foreign investment, he hoped.
China has been enjoying a great upper submit bilateral trade. In the last fiscal season, China exported $12 billion worth of merchandise to Bangladesh, while Bangladesh’s exports to the united states stood at a paltry $831 million.
Businesses claim that even though labour found in Bangladesh is cheaper than found in China and that Bangladeshi goods have huge demand found in Chinese market, Bangladesh isn't being able to rise exports to China due to tariffs.
Bangladesh Tanners’ Association President Shahin Ahmed said Bangladesh could previously export above 3,000 items to China without facing tariff barriers with the addition of 35 percent worth to those. However, because the extra prominent export products were out of your list of products under the facility, Bangladesh could not get the service on almost all of the potential export items.
At the moment China buys 50 percent of Bangladesh’s tannery products, he said, adding that the sector will take advantage of the newly announced facility.
Bangladesh Association of Pharmaceutical Sectors Secretary Shafiuzzaman said, “Although Bangladesh’s pharmaceutical industry depends on recycleables from China, we can supply cheaper drugs to China.”
Pharmaceutical companies on Bangladesh can still make gain exporting drugs of equivalent standard at 20-25% cheaper rates than those offered by Chinese manufacturers, he said, adding that the new tariff-free facility will expand the marketplace for Bangladeshi drugs in China.
Commenting on this, Bangladesh Garment Makers and Owners Association President Rubana Huq advised, “China used to provide us duty free gain access to for 60% components of all the tariff lines beneath its LDC scheme through WTO notification, and I believe this has been expanded to 98% because the formalities were heading on for a long time.”
“For most of the items we used to take pleasure from duty-free and quota-free usage of China beneath the prevailing facility, if there were few items left it'll now be included,” she added.
There are certain problems with respect to duty free usage of China, she continued, “There are two schemes by which we can get duty totally free, one is LDC scheme through WTO, and the additional is APTA.
“Though apparently the duty-free and quota-free center is more beneficial for us at this moment than APTA regarding product policy and tariff cut, but when we will lose LDC position we must choose APTA.”
However, Joint Secretary Hafizur Rahman of the commerce ministry said the new facility will never be affected by simply Bangladesh’s graduation from the LDC position. “The APTA service has just been put on hold as a result of this new facility. We will get it again after graduation from the LDC position.”
The commerce ministry said all potential Bangladeshi export products are certain to get duty-free and quota-free usage of China from July 1 this season, but Bangladesh will not have to provide any facility to China because of this.
Commerce Secretary Jafar Uddin said China has offered this center unilaterally to the LDCs at the behest of the Environment Trade Organisation so Bangladesh are certain to get this facility unconditionally.
Forty-one LDCs including Vietnam, Cambodia, Laos, and the Philippines have been enjoying zero tariff treatment on the export what to China.
Nevertheless, Khondaker Golam Moazzem, senior study director of the Center for Policy Dialogue, explained although China has granted this facility to Bangladesh unconditionally, it'll be benefited out of this indirectly.
He said, “Due to its professional policy, China is steadily leaving lighter industries. The united states is generating expensive products rather than cheaper ones.
“China will get an opportunity to change these factories abroad and import those products beneath the zero tariff facility.”