Diversifying the export basket
Tuesday, 23 November 2010
Imtiyaz Hussain
China has reportedly offered duty-free access to 4,721 goods to its markets from Bangladesh sometime ago. The real plus factors in the offer are that the same seek no reciprocity and hardly state any conditions. The only otherwise fair condition is that 40 per cent value addition to the products will need to be shown as done inside Bangladesh.
China is now virtually the second biggest economy in the world. Its 1.30 billion people form the biggest individual domestic market in the world today. The very easy market access to be provided to this vast market for so many Bangladeshi products must be seen as a bright opportunity specially, at a time when marketing of our goods is proving to be difficult or getting squeezed in the developed western countries for various reasons ranging from their recession to protectionist moves. Thus, this opportunity extended by China needs to be exploited efficiently and at the fastest.
The Bangladesh commerce minister was reported by some sections of the media sometime ago to have said that the Chinese offer includes certain categories of garment products. Bangladesh should generally have an edge in competitively exporting garments to China. But there are also some garment products in which Bangladesh may not be so competitive. Therefore, it needs ascertaining first whether the duty-free access includes the garment products in which Bangladesh would be highly competitive to enter Chinese markets. If the offer does not include such products, then there would be need on our part to promptly and effectively engage in talks with China to ensure inclusion of such garments goods specifically in the offer.
Bangladesh's major export products to China presently are raw jute, leather, shrimps, woven garments, camera parts, copper wire, plastic waste and semi-engineering products. But its export base is still concentrated in only a few items. Duty-free access will unlikely to increase the export of Bangladesh goods in far bigger volumes, unless efforts are made on a vigorous scale to help diversify its export basket. Meanwhile, a study will also need to be completed about products in which Bangladesh is not in a position to export to China, but stand a chance to do so with the duty-free offer. Capacities in this sector will, therefore, have to be either created or enhanced, as the case may be, to make the most of this offer.
China has reportedly offered duty-free access to 4,721 goods to its markets from Bangladesh sometime ago. The real plus factors in the offer are that the same seek no reciprocity and hardly state any conditions. The only otherwise fair condition is that 40 per cent value addition to the products will need to be shown as done inside Bangladesh.
China is now virtually the second biggest economy in the world. Its 1.30 billion people form the biggest individual domestic market in the world today. The very easy market access to be provided to this vast market for so many Bangladeshi products must be seen as a bright opportunity specially, at a time when marketing of our goods is proving to be difficult or getting squeezed in the developed western countries for various reasons ranging from their recession to protectionist moves. Thus, this opportunity extended by China needs to be exploited efficiently and at the fastest.
The Bangladesh commerce minister was reported by some sections of the media sometime ago to have said that the Chinese offer includes certain categories of garment products. Bangladesh should generally have an edge in competitively exporting garments to China. But there are also some garment products in which Bangladesh may not be so competitive. Therefore, it needs ascertaining first whether the duty-free access includes the garment products in which Bangladesh would be highly competitive to enter Chinese markets. If the offer does not include such products, then there would be need on our part to promptly and effectively engage in talks with China to ensure inclusion of such garments goods specifically in the offer.
Bangladesh's major export products to China presently are raw jute, leather, shrimps, woven garments, camera parts, copper wire, plastic waste and semi-engineering products. But its export base is still concentrated in only a few items. Duty-free access will unlikely to increase the export of Bangladesh goods in far bigger volumes, unless efforts are made on a vigorous scale to help diversify its export basket. Meanwhile, a study will also need to be completed about products in which Bangladesh is not in a position to export to China, but stand a chance to do so with the duty-free offer. Capacities in this sector will, therefore, have to be either created or enhanced, as the case may be, to make the most of this offer.