The government appears in two minds over ratification of D-8 PTA (preferential tariff agreement), as Bangladesh's motion pushing for the criterion of 30 per cent local value-addition as a least developed country (LDC) failed to sail through, officials said.
A special session of the supervisory committee on PTA among the D-8 members, held last month, could not resolve the issue as at least two member-states expressed their dissent, they added.
Bangladesh is the lone LDC country in the 8-member bloc for economic cooperation. Other members are Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey.
"No concrete decision could be taken in the meeting on 30 per cent value-addition criterion. We are not considering ratification of the PTA just now. We are still examining it," commerce secretary Hedayetullah Al Mamoon told the FE
The PTA is scheduled to be implemented from next month. Apart from Bangladesh, the other members of the bloc decided that at least 40 per cent local value addition will be required to enjoy preferential tariffs for goods of member-states under the treaty.
Bangladesh, being a least developed country or LDC, demanded the tariff preference for its goods against 30 per cent local value addition in the rules of origin (RoO) in the intra-forum trade. Officials said in the special session of the supervisory committee Iran and Malaysia supported the request of Bangladesh concerning 30 per cent local value addition. Nigeria also acquiesced.
At the meeting, held in February in Islamabad, Indonesia informed that its present policy did not support 30 per cent value addition for LDCs. Pakistan and Turkey requested Bangladesh to consider ratification of the PTA. Indonesia and Turkey said they would consider Bangladesh's proposal after the ratification.
A senior official at the ministry of commerce told the FE that ratifying the PTA without ensuring 30 per cent value-addition clause for Bangladesh would run counter to its right as an LDC, as guaranteed in global trade regime. He also said there is no firm assurance that other members will definitely consider Bangladesh's request after adoption of the treaty. "So, we are in hesitation as to what to do at this stage."
The D-8 Organisation for Economic Cooperation was formed 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 standard of living of the peoples of the forum countries.
The combined population of the eight countries is about 60 per cent of all Muslims, or close to 13 per cent of world population. Trade among the D-8 states stood at US$68 billion in 2010.
The forum members signed the PTA at the fifth D8 Summit on May 13, 2006 in Bali, Indonesia. The treaty is designed to gradually reduce tariffs and other barriers to trade in specific goods in order to promote intra-bloc trade.
