There are several things that will affect Bangladesh's economy after LDC graduation. One of which is losing access to preferential market access that allows many of our industries to trade with countries at lower taxes.
Speaking on the twelfth WTO Ministerial Conference (WTO-MC12), where ministers from across the world attended to review the functioning of the multilateral trading system, Centre for Policy Dialogue (CPD) made several observations on Sunday.
“WTO-MC12 Outcomes Next Steps for Bangladesh as a Graduating LDC,” was organized in partnership with Friedrich-Ebert-Stiftung (FES) and CPD.
In his keynote presentation, Mustafizur Rahman, a distinguished fellow of CPD said: “Almost 90% of all export losses of 12 graduating LDCs will be on account of Bangladesh, according to WTO. Bangladesh's export loss due to the loss of preferential market access could be equivalent to about 14.3% of the country's global export (other things remaining the same). Hence, the importance of shifting from preference-driven competitiveness to skills and productivity-driven competitiveness if export performance is to be sustained and enhanced.”
It's being informed that the much-anticipated conference took place after five years following the WTO-MC11 held in Buenos Aires, Argentina back in December 2017.
When asked why Bangladesh will face such a challenge, Mustafizur explained: “Bangladesh is the first major LDC to graduate. The six previously graduated LDCs are mostly small island economies (with a combined population of about 5 million).
“Bangladesh is the one LDC that was able to take the most advantage of LDC-specific special and differential treatment (S&D). Consequently, it has most to lose from the loss of LDC-specific International Support Measures (ISM).”
The keynote presenter said what MC12 came up with in view of concrete measures in support of graduating LDCs was rather discouraging.
Paragraph 5 of the MC12 Outcome Document stated: “We acknowledge the particular challenges that graduation presents, including the loss of trade-related international support measures, as they leave the LDC category. We recognise the role that certain measures WTO can play in facilitating a smooth and sustainable transition for these members after graduation from the LDC category.”
The Outcome Document in paragraph 8 did recall earlier decisions in support of the LDCs: Duty-free Quota-free (DF-QF) market access; LDC-friendly Rules of Origin (RoO); Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver; operationalisation of services waiver and preferential treatment in favour of services and service suppliers from the LDCs; support to LDCs for implementing commitments as regards Category C in view of Trade Facilitation Agreement and others.
“Countries that graduated LDC earlier are smaller than Bangladesh in terms of population and economic size. Considering the economy and population, Bangladesh's graduation has higher significance in terms of the global and local context,” Debapriya Bhattacharya, distinguished fellow of the CPD said in his opening remarks.
“Bangladesh is the only country that utilized the opportunities available properly as an LDC. The country boosted exports by utilizing preferential market access.”
“Now the question is if such opportunities will continue further. If so, how would they operate? The declaration of the MC12 has acknowledged several challenges for the graduating LDCs to be faced after graduation. But there has been no commitment made to overcome them.”
After the keynote presentation, Debapriya said, “Due to the negligence of the powerful countries, demands from the graduating countries are turning weak. Now we have to change our mindset considering Bangladesh as a future non-LDC developing nation.”
“Issues regarding regional cooperation and bilateral trade agreements are to be prioritized. At the same time, preparations should be accelerated at the local level,” he added.
As a chief guest, Yussuf Abdullah Harun, a member of the Standing Committee on the Ministry of Commerce said: “We have seen that the impact of Covid-19 on the global economy was devastating. On the other hand, China and the USA were intensifying their competition to extend their sphere of influence and carve up the biggest share of the global economy for themselves. When the world was in post-Covid-19 recovery the Russia-Ukraine war in February gave a devastating blow to the supply chain.”
“Meanwhile, the speculation was right about the pending global recession and capital market meltdown. In this scenario, governments all over the world are moving towards a strategic autonomy of supplies with cost inefficiency and we need to follow that,” he suggested.
Special Guest Tapan Kanti Ghosh, senior secretary of the Ministry of Commerce said: “Although I'm not an expert, I can still understand the nitty-gritty of WTO agreements due to my two and half years in this position.”
“I did not expect much when I went to the WTO Ministerial Conference and what we saw on the WTO stage was a reflection of the ongoing world economy. I didn't find anything about inclusiveness and transparency on the final day and that disappointed me very much,” he added.
Earlier, the dialogue started with Felix Kolbitz, resident representative of Friedrich-Ebert-Stiftung (FES), Bangladesh, opening remarks.
Among others, Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI), Md Hafizur Rahman, director general of WTO Cell of the Ministry of Commerce and Mostafa Abid Khan, trade specialist and former Member of Bangladesh Tariff and Trade Commission also present at the panels.
