China awaits BD decision on tariff preference change

Syful Islam | Published: May 07, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

China is awaiting a decision from Bangladesh regarding replacing tariff preference it offers under the Asia-Pacific Trade Agreement (APTA) with zero tariff treatment, sources said.
It is seeking Dhaka's opinion before Prime Minister Sheikh Hasina visits Beijing next month to attend the Second China-South Asia Exposition. During her visit, the 13th joint economic commission meeting between the two counties will also take place where signing of an exchange letter on this issue is expected.
Some 4,788 Bangladeshi products enjoy tariff preference under zero tariff treatment while under the APTA, 83 products enjoy the same.
On being approached for opinion by the Chinese government two years back relating to the tariff preference replacement, Bangladesh favoured that all the preference should be given under the APTA instead of zero tariff treatment scheme.
To get tariff preference under zero-tariff scheme, the local value addition limit is set at 40 per cent or the heading is to be changed. Under the APTA rules of origin, the least developed countries must make 35 per cent value addition to get tariff preference in China.
A senior trade official said the tariff preference under the APTA is more helpful for Bangladesh since under the scheme, the local producers need 35 per cent value addition.
Quoting private sector stakeholders, he said 40 per cent value addition will be tough for Bangladeshi manufacturers since they are mostly dependent on imported raw materials.
He said the ministry of commerce (MoC) in a letter two years back also requested the Chinese government to bring down the value addition criteria under zero-tariff treatment at 30 per cent instead of 40 per cent.
The official also said the Chinese government did not pay heed to the MoC letter regarding its proposal. Rather it asked for consent on its proposal.
Â "We will sit soon to further discuss the issue with the officials and stakeholders concerned and take a decision again keeping all aspects in mind," he said.
In a previous letter to the MoC, commercial counsellor of the Chinese Embassy in Dhaka Wang Zijian wrote that the tariff lines under the zero-tariff treatment would cover all preferential tariffs Bangladesh can enjoy under the APTA.
"In order to avoid confusion over two different rules of origin under the APTA and the zero-tariff treatment, the Chinese government would propose replacement of the APTA preferential tariff treatment with the zero-tariff treatment for Bangladesh," he added.
Mr Zijian also wrote that the Chinese government would increase the zero tariff treatment on Bangladesh's exports to China from the existing 60 per cent to 95 per cent to promote further economic and trade relations between the two countries.
The top ten products that Bangladesh exports to China are raw jute, jute yarn, pet bottles, T-shirt and trousers, textile materials, sesame seeds, polyvinyl chloride waste and scrap, hides and skins of bovine animals and objective camera lenses.