The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has put forward a set of recommendations aimed at overcoming existing obstacles to the growth of cross-border trade in agro-based products.
The apex trade body has called for taking measures, including risk management, in accordance with the import and export policy and relevant agro trade laws and rules to ensure that cross-border trade in agro-based products becomes not only risk-free but also more cost-effective, with reduced clearance time.
The FBCCI placed the recommendations following a recent dialogue on cross-border trade issues, particularly importance of introducing risk management in the supply chain of agro-products.
At the dialogue, importers, exporters and business leaders shared their views and experiences on what actually is going on in the sector.
It suggested adopting a resolution from the National Trade Facilitation Committee (NTFC) to take initiatives through relevant agencies for incorporating provision of risk management in their laws and rules to step away from 100 per cent inspection requirement.
The trade body suggested negotiating a Mutual Recognition Agreement (MRA) with the major trading partners with regard to certificates issued.
The FBCCI showed interest in partnering with the government, especially the commerce ministry in implementing the issues. The WTO Trade Facilitation Agreement obligates Bangladesh to introduce a risk-based clearance system by June 30, 2026.
The new Customs Act of 2023, recently passed by the parliament, also made provisions for the risk management system.
At the dialogue, it was agreed that Bangladesh implemented most of the technical provisions of the WTO Agreement on Sanitary and Phytosanitary issues and necessarily updated its import, export policies along with relevant laws and rules of the related government agencies.
But many of the systemic constraints, simplification and automation of import and export, necessary capacity development, according to the FBCCI note.
Currently, physical inspection and testing of agro-based products in port or customs are arbitrary, unscientific, expensive, and time consuming institutional capacity of the agencies concerned and testing laboratories.
In the absence of a modern risk management system, 100 per cent consignments are also physically examined and tested.
The system is going on unabated despite the fact that the rate of non-compliance/violations as detected from the said 100 per cent examination and testing is very negligible, according to the dialogue views reproduced by the FBCCI.
Now export competitiveness is seriously affected due to 100 per cent inspection requirement in the case of imported raw materials or input. This is making the business costlier and ultimately the consumers bear the cost of price hike.
"In spite of the fact that the present practice of 100 per cent examination and test result in negligible detection of violations, but increase clearance cost and time with hassles/malpractices BSTI without scientific assessment/ evidence, is increasing the number of products to be regulated under the Import Policy Order," read the letter.
The FBCCI noted that moreover, the requirement of radiation test in the port is completely unnecessary for food products because importers submit relevant certificates from exporting countries.
The duplication in the test further increases clearance time and extra cost.
The apex trade body also said that the practice of 100 per cent inspection and testing with high cost and more release time but negligible detections of non-compliance should be replaced by institutionally developed modern risk management systems, presently being practiced by the developed and many developing countries.
As per the Export Promotion Bureau (EPB) data, the shipment of agricultural products, including vegetables, dry food, processed food, fruits and tobacco, has fallen by 27.78 per cent as of May of the fiscal year 2022-23 compared to the corresponding period of the current fiscal.
The agro-processing industry exported goods worth US$795.01 million during the May-July period of the FY 2022-23.
In the same period last fiscal, the earning was $1.16 billion.
Agricultural product exports shined bright in Bangladesh's export basket with its proceeds crossing the billion-dollar mark in the FY2021 and continued the growth in the FY 2022, raising hopes for the country's overall external trade to see a boost.
Agricultural goods and related processed foods fetched $1.03 billion in FY2021 and $1.16 billion in FY2022.
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