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China mum about DFQF facility for BD

Dhaka stands to lose as Beijing drags its feet

Syful Islam | January 15, 2019 00:00:00

China remains silent about extending duty-free and quota-free (DFQF) access of Bangladeshi products to its market, though Dhaka agreed to sign a 'letter of exchange' nine months ago.

Despite repeated reminders from Bangladeshi trade officials over the period, their Chinese counterparts did not respond accordingly, officials said.

In April last, Bangladesh had decided to avail such a facility by discarding the benefits it enjoys in the Chinese market under the Asia-Pacific Trade Agreement (APTA).

The duty-free and quota-free market access, extended to other countries, covers 97 per cent tariff lines in China.

Subsequently, a note was sent to China expressing the country's intention to sign the 'letter of exchange' for availing the facility.

However, since then China has not been responding to Dhaka's communiqué in this connection.

A senior official at the ministry of commerce told the FE they contacted Chinese embassy officials in Dhaka verbally and in writing on several occasions.

"Each time we contact them they say they have not received any response from Beijing in this regard," he said.

"We've received identical answers from them during the last nine months," the official said wishing not to be named.

According to officials, China offered duty and quota-free facility for 60 per cent tariff lines to all the least-developed countries (LDCs) in 2010 under the sixth ministerial council declaration of the World Trade Organisation (WTO) held in 2005 in Hong Kong.

Later, it extended the facility to 97 per cent tariff lines for the LDCs, which had signed the letter of exchange with it by 2015. In this case, Beijing noted that LDCs who would sign the letter of exchange would not be eligible for any further benefits under any other multilateral or regional pacts in the Chinese market.

The LDCs that had signed the letter of exchange after the deadline were granted such a facility for 95 per cent tariff lines.

As Bangladesh and Mauritania did not sign such a document, the two countries still entitled to facility for 60 per cent of their tariff lines.

Another trade official said since Bangladesh is likely to graduate to the developing country status by 2024, there is a scope for enjoying the facility for five more years.

He said China imposed a condition that Bangladesh will have to drop facilities it enjoys under APTA to avail the 97 per cent DFQF facility.

"Now we agreed to drop the APTA-related facility in the Chinese market, still Beijing is not responding," the official said.

He said Bangladesh will ultimately be deprived of the facility.

The bilateral trade between Bangladesh and China is over US$ 11 billion a year.

Bangladesh's imports from China stood at $10.19 billion in fiscal year 2016-17 while exports to the world's second-largest economy was at $ 949.41 million in the same year.

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