Deadly unseen cost
Wednesday, 12 September 2007
BANGLADESHI business creates disgust among concerned citizens when any segment of its leaders still barely talks about reversals suffered by the local industries owing to subsidised export and dumping -- export at reduced prices, below cost of production, by foreigners to this country. In the 12 years since the establishment of the World Trade Organisation (WTO) in 1995, they could not file a single case against such exports with supporting documents for officially taking remedial measures. Neither could the authorities firm up in the intervening time a complete official arrangement with rules and well laid-out procedures to receive, and dispose of, any such case. In short, one may justifiably say that this country has not yet fully entered into the era of global competition in so far its preparation for legitimate protection of local industries from unfair trade by foreigners is concerned.
According to relevant agreements of the World Trade Organisation (WTO), subsidised export by foreigners should attract countervailing duty and their export at prices below the cost of production should be counter-balanced with an extra remedial duty, the anti-dumping duty. The relevant WTO rules provide for both in the interest of fair trade and legitimate protection of local industries. In a recent meeting on the country's trade defence mechanism, arranged by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), speakers focused on these issues. Local industries, they agreed, are being unduly hurt by similar export of many items by foreigners. They regretted the absence of initiatives for proper remedial measures. Sugar, one speaker pointed out, is being exported to this country on giving $30 export subsidy per tonne, which, he said, has posed a serious existential threat to the relevant local industry. A representative of one major chamber reportedly said local entrepreneurs do not want to make disclosure (to authorities) about their losses caused by dumping to avoid the risk of higher tax payment. She thus exposed how a particular local fear has been unduly benefiting foreigners at a great cost to the country, the cost of local industries having to lose business in the domestic market due to unfair competition from rival foreign products and the consequential dampening of local industrialisation.
One would be indeed appalled if one measures the visible and the unseen adverse impacts of the said unfair trade practices on the national economy, local industries and the society. If the unseen costs, like job loss, adverse impact on employment generation, social instability fuelled by privation and unemployment and missing the scope of generational improvement due to persistence of economic difficulties, are all summed up with the seen cost of direct wealth loss, the adverse impact will be found to be enormous. As business creates national wealth and, functionally, wealth is a measure, a standard, and a store, both the government and the local business would only pave the way for a major national disaster if they individually and collectively unwittingly ignore and continually refrain from taking actions against the aforesaid harmful unfair trade practices. A propensity to punish the existing set of local industrialists for their supposed intention of not revealing the damage due to dumping to avoid payment of higher taxes may seen justified. But is it at all justified to reward the offending foreign exporters by not resisting their unfair trade on the same ground? How will the country overcome the losses being suffered in future due to the prospect of local industrialisation also being marred by the said unfair export by foreigners?
Political independence would convey hardly any meaning if the people continue to suffer badly and feverishly long for the cherished economic emancipation. Today's reality of more and more people migrating abroad as economic refugees emphatically underlines that local industries must be protected from unfair trade practices through whatever policy adjustments are called for. The attainment of prosperity through industrialisation at home should remain the basic and overriding goal. All creative minds within the government should sit together with a strong positive will to undo the aforesaid threat to the national economy.
According to relevant agreements of the World Trade Organisation (WTO), subsidised export by foreigners should attract countervailing duty and their export at prices below the cost of production should be counter-balanced with an extra remedial duty, the anti-dumping duty. The relevant WTO rules provide for both in the interest of fair trade and legitimate protection of local industries. In a recent meeting on the country's trade defence mechanism, arranged by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), speakers focused on these issues. Local industries, they agreed, are being unduly hurt by similar export of many items by foreigners. They regretted the absence of initiatives for proper remedial measures. Sugar, one speaker pointed out, is being exported to this country on giving $30 export subsidy per tonne, which, he said, has posed a serious existential threat to the relevant local industry. A representative of one major chamber reportedly said local entrepreneurs do not want to make disclosure (to authorities) about their losses caused by dumping to avoid the risk of higher tax payment. She thus exposed how a particular local fear has been unduly benefiting foreigners at a great cost to the country, the cost of local industries having to lose business in the domestic market due to unfair competition from rival foreign products and the consequential dampening of local industrialisation.
One would be indeed appalled if one measures the visible and the unseen adverse impacts of the said unfair trade practices on the national economy, local industries and the society. If the unseen costs, like job loss, adverse impact on employment generation, social instability fuelled by privation and unemployment and missing the scope of generational improvement due to persistence of economic difficulties, are all summed up with the seen cost of direct wealth loss, the adverse impact will be found to be enormous. As business creates national wealth and, functionally, wealth is a measure, a standard, and a store, both the government and the local business would only pave the way for a major national disaster if they individually and collectively unwittingly ignore and continually refrain from taking actions against the aforesaid harmful unfair trade practices. A propensity to punish the existing set of local industrialists for their supposed intention of not revealing the damage due to dumping to avoid payment of higher taxes may seen justified. But is it at all justified to reward the offending foreign exporters by not resisting their unfair trade on the same ground? How will the country overcome the losses being suffered in future due to the prospect of local industrialisation also being marred by the said unfair export by foreigners?
Political independence would convey hardly any meaning if the people continue to suffer badly and feverishly long for the cherished economic emancipation. Today's reality of more and more people migrating abroad as economic refugees emphatically underlines that local industries must be protected from unfair trade practices through whatever policy adjustments are called for. The attainment of prosperity through industrialisation at home should remain the basic and overriding goal. All creative minds within the government should sit together with a strong positive will to undo the aforesaid threat to the national economy.