Bangladesh to get more trade benefits from China as an LDC

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Bangladesh really wants to secure extra trade advantages from China as a good least developed country (LDC) rather than signing a free trade arrangement with the Asian monetary giant, according to commerce ministry officials.

"We don't want to signal an FTA with China as the region is the major trading partner of Bangladesh. If we sign the FTA, we will eventually lose a lot of earnings each year," explained Sharifa Khan, additional secretary (FTA) of the commerce ministry.

The commerce ministry has recently accepted China's offer for the duty-free import of 97 % of most Bangladeshi products beneath the LDC category, effectively rejecting the huge benefits the country would have received beneath the Asia-Pacific Trade Agreement (APTA).

Bangladesh and China are actually both APTA member nations.

In 2015, China, Bangladesh's most significant bilateral trade partner, offered many LDCs extensions on the trade benefits for up to 97 % of their goods. On the other hand, nations that used the give were no more allowed to enjoy the benefits beneath the APTA.

Since Bangladesh was later in its response, China will now send a fresh offer for 95 per cent of the country's goods.

China was likely to issue a letter to Bangladesh found in this regard in January."But unfortunately, the letter is but to be received simply by the commerce ministry due to the coronavirus outbreak," Khan told The Daily Superstar over phone.

Incoming goods via China amount to a lot more than $14 billion and receive Bangladesh Tk 23,000 crore when import duty each year.

The import duty levied on the Chinese products makes up about 30 % of the total income collected from import duties annually.

"So, we aren't interested to indication the FTA with China despite the fact that the Chinese federal government does prefer to," the excess secretary said.

However, Bangladesh is near to signing an FTA with Indonesia and the offer could be finalised this year if normalcy can be restored immediately after quelling the coronavirus outbreak.

"After we graduate to a growing country found in 2024 and emerge from the LDC bracket, we will once again enter the APTA to take pleasure from trade benefits from China," Khan added.

China is a essential trade partner of Bangladesh for various causes. For instance, the country's garment sector is intensely reliant on Chinese fabric although local makers can supply nearly 80 per cent of the yarn expected by the knitwear sector.

Bangladesh's woven garment makers import almost 60 per cent of all the fabrics they might need directly from China seeing that local weavers cannot source adequate raw materials.

In total, apparel makers in the country source 46 % of their recycleables from China.

Bangladesh is also dependant on Chinese dyes, chemicals and capital machinery.

The bilateral relations between your two nations go deeper though as China is currently a major export destination in the Asian region for Bangladesh.

China is among the biggest buyers of apparel products in the world. The domestic marketplace for garments in China will probably be worth $350 billion as the center cash flow bracket is expanding, according to estimates from the International Textile Suppliers Association.

Clothes exports from Bangladesh to China are actually increasing as time passes as a section of consumers in the centre income bracket cannot spend the money for high-end garment items manufactured in China.

That is why they rely upon cheaper Bangladeshi products, industry insiders said.

The cost of apparel production in China has truly gone through the roof because of a shortage of skilled workforce. This is because the personnel prefer jobs in extra sophisticated technological industries instead of the garment sector.

The export of varied merchandise, specifically apparel products, from Bangladesh to China is continuing to grow rapidly recently following increased require while preferential trade benefits receive to local exporters.

In fiscal 2018-19, Bangladesh's total exports to China amounted to $831.20 million while it was $694.97 million just the previous year, in line with the Export Promotion Bureau.

In the February-July period of the existing fiscal year, Bangladesh earned $470.20 million through exports to China. Of this total, garment exports accounted for 80 %.

"Bangladesh should benefit from the duty-free rewards for 97 per cent of its things and reject the APTA for the higher interest of the united states," said Abdur Razzaque, exploration director of the Policy Research Institute.

Currently, there are about 65 Bangladeshi things that will be allowed duty-free usage of the Chinese market beneath the APTA while more than 5,000 goods benefit from the same benefit under the LDC coverage.

"That's why Bangladesh must accept the 97 per cent package," Razzaque told The Daily Superstar.

It really is believed that China would be Bangladesh's third Asian export vacation spot after Japan and India, where in fact the country can send a lot more than $1 billion value of goods.

Presently, Vietnam and Cambodia happen to be enjoying increased exports to China since they possess preferential trade agreements with the world's most populous nation.

"If Bangladesh is granted the 97 % bundle, exports to China increase manifold," Razzaque said. 
Source: https://www.thedailystar.net

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