Dhaka conditionally accepts Chinese proposal on tariff preference change

Bangladesh has decided to conditionally accept a Chinese proposal to replace the tariff preferences that the latter offers under the Asia-Pacific Trade Agreement (APTA) with zero tariff facility granted under the multilateral trade deal reached under the auspices of WTO, sources said.
The Ministry of Commerce (MoC) has already conveyed the decision to the Chinese government through the Ministry of Foreign Affairs, they added.
However, Bangladesh has set some conditions in relation to the Chinese proposal.
A senior MoC official said Bangladesh will sign a Letter of Exchange in this regard with China provided the conditions are accepted by the latter.
Elaborating the conditions, he said Bangladesh would not avail the trade concessions offered under the APTA as long as the Chinese offer of zero-tariff treatment under the World Trade Organisation remains in force.
"If the zero tariff treatment is suspended or withdrawn for any reason, Bangladesh will again claim the APTA concessions from China," he said.
Bangladesh demanded that the rules of origin for products listed under the 'product specific rules' shall be less stringent than the general rules of origin under zero-tariff treatment.
The MoC officials also said Bangladesh's rights and obligations under APTA should remain unchanged except for tariff concessions exchanged with China only.   
According to trade officials, some 4,788 Bangladeshi products enjoy zero-tariff treatment under the WTO arrangements while under the APTA only 83 products enjoy the same.
On being approached for opinion of the Chinese government two years back relating to the tariff preference replacement, Bangladesh favoured all the preferences under the APTA instead of zero tariff treatment schemes.
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 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.

In a letter to the MoC, commercial counsellor of the Chinese Embassy in Dhaka Wang Zijian earlier 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.
The top ten products that Bangladesh exports to China are raw jute, jute yarn, pet bottles, T-shirts and trousers, textile materials, sesame seeds, polyvinyl chloride waste and scrap, hides and skins of bovine animals and objective camera lenses.