Duty-Free Access For 7,800 Items To China
Dhaka rejects Beijing’s new offer on higher value addition ground
Dhaka has rejected an alternative offer from China on duty-free market access for 7,800 products from Bangladesh with enhanced value addition as the commerce ministry finds existing duty-free facility under the APTA arrangement for Chinese market more viable.
The Chinese offer entails 40 per cent value addition criteria as a mandatory pre-condition to enjoy the duty-free facility in contrast to current 35 per cent criteria Bangladesh has long been enjoying for its 4,800 products in the Chinese market under the Asia Pacific Trade Agreement, sources close to New Age said on Sunday.
The commerce ministry appraised the Chinese administration last week of its latest stance after China had offered in May to accept their offer on bilateral basis under the framework of the World Trade Organisation, a top trade official at the commerce ministry said.
The Chinese offer, furthermore, said the new offer once accepted by Bangladesh would scrap the existing facility under the APTA arrangement.
‘We have replied in the negative as the Chinese offer would impact our export and dwarf the APTA as a potential trade block comprising Asian emerging economies including Bangladesh, China and India,’ Shawkat Ali Warasi, Additional Secretary (Export), told New Age on Sunday.
‘Unless a meeting of APTA scraps its existing facility offered to Bangladesh, we unilaterally simply cannot forego,’ he added.
The trade officials point to two major reasons for the refusal of Chinese offer.
The first reason being the country’s trade interest as far as value addition criteria is concerned, argued tariff commission in a study on the Chinese offer, saying the large contributing exporting items –knit and woven garment—cannot add 40 per cent value.
Secondly, the trade officials believe the country should not forego the benefit derived from years of negotiation with the member countries of APTA. Such a practice would belittle Dhaka’s role in other regional trade blocks.
Bangladesh has been enjoying zero-duty facility for 4,800 items in Chinese market since July 2010, which accounts for 60 per cent of China’s tariff line. The value addition criteria for availing of the facility has been 35 per cent, a trade official said.
Warasi said the country could not afford a Chinese offer which might shrink Bangladesh’s current exports rather than expanding its trade in China.
Explaining, he said the country’s woven garment items could not add more than 30 to 35 per cent value, thus it would make the Chinese offer largely ineffective.
Officials concerned said they had been pushing for a reduction in the value addition criteria under the APTA from the existing 35 per cent to 30 per cent.
Bangladesh exported goods worth US$ 458.12 million to China in 2012-13 fiscal year against imports worth US$ 6.30 billion. The woven and knit garments constitute the lion’s share of export from Bangladesh to China, according to figures of the Export Promotion Bureau.
-With New Age input
