IMF opposes safeguard measures against cheap imports

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Doulot Akter Mala
The government is facing stiff opposition from the International Monetary Fund (IMF) in its bid for introducing safeguard measures to protect the local industries from the onslaught of cheap imports.
The IMF has been opposing the government's move saying that the measure would go against the World Trade Organisation's (WTO) rule, sources said.
The government has planned to introduce the safeguard measures to facilitate growth of local industries, which are demanding readjustment of some import duties that are affecting them, sources concerned said.
The National Board of Revenue (NBR) has drafted a rule relating to safeguard measures that has already been vetted by the law ministry.
The measures are expected to come into effect from July 1. The chairman of the Bangladesh Tariff Commission (BTC) will head the proposed safeguard authority. He will identify the products entitled to enjoy safeguard measures.
The safeguard authority will also examine the impact of excess import of certain finished products on local industries.
He will recommend the level of safeguard duty to be imposed on import of the particular products.
The government has clarified to the IMF that the safeguard duty would be imposed only on those products which are imported in excessive quantities, thus adversely affecting the local industries, a finance ministry source said.
The government also told the IMF that there was a provision of safeguard duty in the WTO rules, sources said.
However, the government has to inform the WTO about the imposition of such duty explaining reasons, he said.
"The government will be introducing the duty for the first time to save the local industries which have expressed their strong resentment against the customs duty levied on raw materials ," a competent source said.
But on the other hand, the Washington-based multilateral institution, the IMF, argues that the imposition of such duty will be in contravention of the WTO rules, he added.
"The government is bound to look into the national interest first before taking any step," he said.
Local business leaders have long been pursuing the government for framing such a rule to help local industry stay competitive in the face of surging import of low-priced products.
According to draft rules of safeguard duty, local industries, which are affected by cheap imports, will have to lodge complaints with the safeguard authority seeking protection.
The complaints must be substantiated with detail proofs of which products are harming the local industries and how.
The rules said the authority might recommend an interim duty on the imported products on the basis of a preliminary investigation.
The exporters will also get the chance to justify their positions and prove that their export prices are not lower than the local manufacturing costs, or their export volumes do not exceed the allowable limit, sources said.
The safeguard rules will also outline an investigation policy for the authority.
The government has to repay the duty amounts to the exporters if the allegations were found false, according to the policy.