Mozidur Rahman Biswas :
Part -2
Bangladesh is going to join negotiations at the WTO at a time when the global body itself has entered into its own particular crisis, the senior economist pointed out. “Some would say that in the presidency of Mr Trump, WTO entered into a process of life support, whether it was alive or dead became somewhat uncertain,” he recalled the Trump era saying that the whole concept of the rules-based international economic system was “progressively eroded and aggressively assaulted”. The trading arrangements now are not being guided by WTO-driven rules at all, they are being dictated by a series of bilateral and regional trading arrangements, be they free trade arrangement or comprehensive economic partnerships, Prof Rehman said, identifying the United States as the main violator of the global trading system. “If you look at the trading regime of the US today, it trades on different terms with probably 50 different countries.” he maintained.
Two biggest trading countries, the US and China, are now setting their own rules of trading, he commented, stating that the emergence of a new set of rules would depend on the ongoing negotiations at the WTO. He cited the case of Vietnam, which is not getting any trade benefit after graduating as a developing country but will get privileged access to the EU at a time when Bangladesh will lose duty-free access and face some 10% tariff on its products. Bangladesh needs to change the whole nature of the agenda in negotiation and exit from the “same old argument” for extension of privileges given to LDCs, the economist suggested. “Actually in 50 years we have not negotiated a single FTA with anyone, whereas countries around us who are not getting the benefit of duty-free access, have been working out their own negotiations,”. Prof Rehman Sobhan pointed out adding his suggestion that Bangladesh needs to take into account the issues attached to the EU’s new GSP+ strategy. The new sets of variables like issues of handling labour relations and practicing human rights are among the possible determining factors of future trade relations. As the trade world is no longer “business as usual” and as such he being the pioneer in economic research, who served on the national planning commission and BIDS before founding the CPD, Prof Rehman Sobhan urged researchers and policymakers to find out what problems were faced by countries which have graduated and how they overcame those in the path of business. Voicing his thoughts on the graduation issue, Apex Group Chairman Syed Manzur Elahi said today or tomorrow Bangladesh must stop “dragging on to the eternity of being an LDC.” One of the big problems of remaining an LDC is “image crisis,” the leather industry pioneer, he pointed out for exporters, and buyers’ have to remain confident in timely delivery of products before the question of price.
Syed Manzur referred to the high cost of trade transactions as import letters of credit (LCs) issued by local banks are often not accepted in foreign countries if not reconfirmed by any global bank, expressing his feeling that graduation could help improve sovereign guarantee and credit ratings. Other issues which now matter much in global trade are high productivity, sustainability and compliances, he pointed out. Whether there is rainwater harvesting in the factory, whether the factory is sustainable in production, quality and supply, the senior businessman rounded up the evolving conditions from global buyers. “Buyers want to know the number of shoes produced per minute. If you can’t, they will rush to Vietnam or Madras in India,” he said adding that “Nike, Adidas order in billions as such the export figure will jump by 10 billion dollars if they come. LCs, sustainability and compliance matter in dealing with these big players”. Citing skilled human resources is one big challenge; Syed Manzur Elahi said his industry is facing a shortage of skilled labour and managers. “That is why some 25,000 foreigners are working in industries here. They are taking out $5 billion officially and another $5 billion unofficially. Can we afford this big amount going out every year?”
Graduating from LDC or not will matter little if Bangladesh fails to improve business atmosphere and if DHL package needs a week to be cleared from customs and if NBR collects 20 per cent tax on technology transfers, the businessman said, comparing with the atmosphere in Vietnam, which diversified its exports and is growing fast. CPD, comprising some of the leading professional economists and financial analysts, has been advocating more for skill-driven competitiveness to face post-LDC challenges.
They believe that the government should develop skills-driven competitiveness instead of traditional preference-driven strategy to fit the country’s economy to face challenges stemming from probable losses of zero-tariff market access and other facilities following LDC graduation. The government also needs to restructure incentives, focusing on technology upgrade and skill formation, they also said at a virtual dialogue. The Centre for Policy Dialogue (CPD and Friedrich-Ebert-Stiftung, Bangladesh Office jointly organised the discussion titled “Upcoming MC12: Bangladesh’s Expectations and Possible Stance”.
(The writer is a Senior Journalist who writes for: Promoting Knowledge based Society, Socio-Economic Transmission, Human Rights and Good Governance).
— To be continued —
