EU-China 'trade war' unlikely to benefit BD

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Syful Islam Bangladesh is unlikely to benefit from the ongoing 'trade war' between the European Union (EU) and China with its tiny product basket, an analysis of the ministry of commerce (MoC) reveals. MoC officials looked into the EU policy measures against Chinese products and found that Dhaka might not benefit from the 'trade war' as Bangladeshi manufacturers do not produce such items. The European Commission (EC), after an investigation, has imposed anti-dumping duties (ADDs) on import of solar panels, cells and wafers. The ADDs will be charged at the rates ranging between 11.8 per cent and 47.6 per cent, if the products are imported to the EU from China. The EC measure came as it found that Chinese companies were selling solar panels to Europe at prices below their normal market rates eroding significantly the EU solar panel producers' competitiveness. The fair value of a Chinese solar panel should be 88 per cent higher than the price at which it is sold to the European market. The Chinese exporters have already grabbed more than 80 per cent of the EU market and their production capacity currently amounts to 150 per cent of the global consumption. Earlier in October 2011 the EU imposed 48.5 per cent ADD on bicycle imports from China. It will remain in force for a period of five years. Following imposition of the ADD, China has allegedly started selling bicycles to the EU market illegally-re-packaged products are re-routed through Indonesia, Malaysia, Sri Lanka and Tunisia. The EU is now investigating the matter. Out of a total of 82 cases instituted by the EU during the period of 2009-13, as many as 35 were anti-dumping and anti-subsidy cases. During the January-April period of the current calendar year five investigations concluded with imposition of definitive duties. Of them, three were against China. On the other hand, China imposed ADD on import of high-performance stainless steel seamless tubes from the EU. The EU on June 13 last requested for consultations with China at the World Trade Organisation concerning the Chinese ADD. Commercial counsellor of the Bangladesh Embassy in Belgium, Tapan Kanti Ghosh, in a letter to the MoC said the EC trade measures in some cases might create good opportunities for Bangladeshi exporters. However, after an analysis of the issues, the MoC officials concluded that Dhaka might not benefit from the 'trade war' as Bangladeshi manufacturers do not produce such items. A senior MoC official has told the FE that getting benefit from such a trade war depends on Bangladesh's competitiveness in the global market, when it comes to those products, the entry of which is restricted in the EU market. He said the USA imposed ADD on import of Vannamei shrimp from some countries including India. "Bangladesh, being a mid-level exporter, could raise its tiger prawn export to the USA taking this advantage," he added. The official said, of the Chinese products on which the EU imposed ADD, Bangladesh manufactures and exports only bicycles while it is dependent on import of the other products. Another MoC official said Bangladesh's product basket is very thin. "To seize benefit from such trade disputes and raise the volume of exports Bangladesh will have to increase the number of export products and the production capacity." He also said product diversification should be given the top priority in the days to come to raise the export volume.