The remaining 3 percent

Bangladesh’s textiles may still face US and EU tariffs

The 50 least developed countries (LDCs), which includes countries like Afghanistan, Bangladesh and Cambodia, were supposed to get a good deal as part of the World Trade Organisation’s Doha development round. They hoped to get duty-free, quota-free access to developed country markets for all their goods. Last week’s ministerial meeting in Hong Kong agreed to give duty-free access to 97% of their exports. That does not sound like a bad deal on the surface. But for Bangladesh, it is.

That’s because the remaining 3% of the items ‘yet to be negotiated’ includes knitwear, pants, blouses and underwear, and textiles are Bangladesh’s biggest exports.

While its government has put a brave face in the face of this setback, Bangladesh’s Centre for Policy Dialogue, an independent think-tank, has cited the government’s lack of political and negotiation skills as contributing to the failure. And the ‘South Asian solidarity’ that it was counting on didn’t really materialise. While India supported full exemption for LDCs, Pakistan and Sri Lanka argued against giving duty-free access exclusively to the LDCs.

Besides, the CPD brief said, Bangladesh failed to anticipate adequately that certain textile importing developing countries would play an open and active role against it. “The role of Pakistan and, partly, Sri Lanka was to the detriment of Bangladesh’s interests,” reported the team, remarking, “Our South Asian solidarity was of no help to Bangladesh.” [The Daily Star]

It appears that Pakistan, which is not an LDC itself, reasoned that it would end up as one if it were to lose markets to LDCs.

6 thoughts on “The remaining 3 percent”

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  2. Well are we going back to a quota system.
    In the long run each country would need to find an efficient niche to survive.

  3. No doubt, the quota free access to US market in the past was a booster for a LDC country like Bangladesh to establish their products. Over the years Bangladeshi products improved to international standard and I am proud to say that Bangladeshi garments are sought after by the US and European consumers, not only because of low price, but for quality. I can verify that from the export stock lots widely available in Bangladesh markets. After the garments, the knittwear industry is also picking up in quality and varieties.

    The Bangladesh govt. was ill prepared for the negotiations and perhaps they took certain things for granted. They forgot that in this cruel world trade shapes the interpersonal relations between countries and nobody is willing to give any concessions to others.

    But Bangladesh should not be disheartened as I think its products can compete with any other countries, even China in all aspects (Chinese products are cheap but of very low quality). So if Bangladeshi products are not subjected to any politics or embargo, they can also flourish at the current pace in open market without any protection.

  4. I’m of the opinion the United States had no intention of giving any LDC quota-free access given the political opposition arrayed against it.

    Textiles, behind agriculture, is a dying industry in the United States, and has been for a long time, but the industry still has a strong lobby in the United States. They have even suceeded in having the U.S. government hit Chinese textile manufacturers with some stiff tariffs.

    Like Rezwan said, Bangladesh has nothing to worry about. This is just a battle lost, the war will be won.

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