Dhaka for D-8 to protect its interest as LDC

Bangladesh will press for protection of its interest as  a least developed country (LDC) in the trade ministers' meeting of Developing-8 (D-8) countries scheduled to be held in Istanbul next week, officials said.
A four-member Bangladesh delegation, led by commerce minister Tofail Ahmed, will attend the meeting where they will argue for upholding the D-8 principle of benefiting all members equitably, they added.
Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey are members of the bloc. Among the D-8 members, Bangladesh is the lone LDC while others of the group have already graduated to the status of developing countries.
A senior official at the Ministry of Commerce (MoC) told the FE that the D-8 countries have set local value addition requirement at 40 per cent for preferential trade among the members.
But, as a LDC, Bangladesh will not be benefited if 40 per cent value addition to Rules of Origin (RoO) is applied to all member-countries. Bangladesh demands that the minimum value addition criteria should be lowered to 30 per cent for it, he added.
Additional secretary of the MoC Monoj Kumar Roy said the objectives of D-8 preferential trade agreement (PTA) are to improve member states' position in the global economy, diversify and create new opportunities in trade relations, enhance participation in decision-making at international level, and improve standards of living.
"But Bangladesh will not be benefited from the D-8 PTA unless the minimum value addition is lowered considering its economy and capacity," he said.
Mr Roy also said other member-states of D-8 are opposing Dhaka's proposal of setting minimum value addition criteria at 30 per cent without considering manufacturing and export capacity of Bangladesh.
He said the South Asian Free Trade Area (SAFTA), the Asia-Pacific Trade Agreement (APTA), the Trade Preferential System among the OIC Member Countries (TPS-OIC), and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) kept the minimum value addition criteria at 30 per cent for the LDCs considering their economic strength.
"Most of the D-8 countries are members of TPS-OIC. They make intra-OIC trade with 30 per cent value addition. So, as a LDC, Bangladesh may prefer to make trade under TPS-OIC instead of D-8 PTA if the value addition criteria is not set at 30 per cent for it," he added.
He also said Bangladesh may experience immense pressure from other LDC counties if it agrees with the 40 per cent value addition criteria set by D-8 members for the PTA.
"The possibility of Bangladesh's market expansion in D-8 countries is bleak unless the value addition requirement in lowered," he said.
Nearly 12 per cent of total annual imports of Bangladesh is being done from other D-8 members while its export there is only 4.0 per cent.
Contrary to Dhaka's demand at a meeting of the supervisory committee of D-8 PTA in Ankara early this year, Egyptian trade officials said as an LDC Bangladesh has already been given special treatment in elimination of para-tariffs barrier.
According to the Article-9 of the D-8, PTA contracting members shall eliminate the para-tariffs immediately upon entry into force of the agreement while the LDCs will eliminate the para-tariffs within three years.
Bangladesh has signed the agreement but is yet to ratify it due to disagreement over the rules of origin criteria.
"In most cases, Bangladesh needs to be dependent on imported raw materials. It won't be possible for Bangladeshi exporters to be competitive with 40 per cent local value addition with raw materials imported from abroad," said another MoC official.
He said: "We had consultation with the stakeholders who were of the opinion that 40 per cent local value addition won't be possible for them."
Bangladesh has a significant trade imbalance with other D-8 member countries. In fiscal year 2011-12, Bangladesh's total import from the other D-8 members was valued at US$3,526 million while export to them was valued at $821 million only.

[email protected]