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POLICY REVIEWS: SECOND PRESS RELEASE AND
Bangladesh: May 2000
Members of the TPRB have been impressed both by Bangladesh's economic growth since its previous TPR and by its pursuit of trade liberalization in the context of wider structural reforms. The economic growth and progress on structural reforms have been accomplished despite immense difficulties facing Bangladesh, including devastating floods and political instability.
5 May 2000
POLICY REVIEW BODY: REVIEW OF BANGLADESH
The Trade Policy Review Body of the World Trade Organization (WTO) concluded its second review of Bangladesh's trade policies on 2 and 4 May 2000. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion.
The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.
The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Bangladesh and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992 and 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), C˘te dIvoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995 and 1997), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995 and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992 and 1996), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991 and 1996), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru(1994), the Philippines (1993 and 1999), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
We have had open and useful discussion on Bangladesh's trade and related policies. Members of the TPRB have been impressed both by Bangladesh's economic growth since its previous TPR and by its pursuit of trade liberalization in the context of wider structural reforms. The economic growth and progress on structural reforms have been accomplished despite immense difficulties facing Bangladesh, including devastating floods and political instability.
Impressive though its recent economic growth has been, it had not been sufficient to make much, if any, of a dent in the poverty that pervades Bangladesh. Moreover, Members felt that the full benefits of the structural reforms, including trade and investment liberalization, that Bangladesh has taken could not be realized without further steps to improve the provision of essential infrastructure services, notably power, telecommunications, transport and port facilities, and strengthen the banking sector as well as measures to enhance governance. Inadequate infrastructure and other essential services together with weak governance increased the costs of doing business in Bangladesh.
Members commended Bangladesh for its strong support of the multilateral trading system, particularly its efforts as a leading LDC to ensure that the specific needs and concerns of LDCs are addressed. Members expressed their appreciation of Bangladesh's efforts to pursue trade liberalization, including large tariff reductions, rationalization and simplification of the tariff structure, the elimination of some quantitative restrictions and the opening-up of state-dominated services to the private sector. Members also commended Bangladesh for its liberal foreign investment regime.
At the same time, Members voiced a number of concerns, referring inter alia to: the relatively few tariff bindings; the large discrepancy between the applied and bound tariff rates; the complexity of the border tax regime, which involved numerous tariff concessions and additional charges; the lack of transparency, and the need to streamline, both customs and tax administration; the Government's weak revenue base necessitating its heavy reliance on border taxes; Bangladesh's narrow export base, which is dominated by ready-made garments; and an inefficient banking sector. Members also encouraged Bangladesh to make use of the GATS framework for making its liberalization efforts credible in the state-dominated services sectors, thereby fostering investment in these sectors.
In addition, Bangladesh was encouraged to ensure that any future regional arrangements do not interfere with or diminish the value and role of the multilateral trading system.
Members noted the difficulties faced by Bangladesh in implementing WTO agreements, including notification obligations; these are not unique to Bangladesh, but are shared by many developing countries. Consequently, there was unanimous agreement that more technical assistance ought to be provided to Bangladesh and other LDCs, particularly through the Integrated Framework, in order to strengthen its institutional and technical capacity in the trade policy area. It was recognized, however, that assistance would not address all Bangladesh's problems.
Members requested clarification on a number of more specific matters, including:
measures to improve the fiscal situation and raise the quality of public spending;
steps to speed up structural reforms;
the adoption of the WTO Agreement on Customs Valuation and the use of mandatory pre-shipment inspection;
the changing role of the Bangladesh Tariff Commission;
import clearance requirements, including radioactivity tests for food imports;
import prohibition on grey cloth and other textile products;
government procurement procedures;
measures to improve public accountability and administrative competence;
proposed amendments to Bangladesh's legislation protecting intellectual property rights;
pre-clearance requirement for investment in ready-made garment and financial services sectors;
steps to liberalize and thereby improve essential infrastructure services, notably power, telecommunications and transportation;
measures to liberalize and thereby strengthen the financial sector;
actions to broaden Bangladesh's export base; and
Bangladesh's strategy for developing its natural gas sector.
Members greatly appreciated the clarification and responses provided by the Bangladesh delegation.
In conclusion, it is my feeling that this has been a successful Review of Bangladesh's trade policies. Members encouraged Bangladesh to persist in its economic reforms; these will improve the quality of life of its people, including through the alleviation of poverty. Bangladesh is to be commended for its commitment to WTO principles and its leadership in this institution. We look forward to Bangladesh's continued active participation in, and integration into, the multilateral trading system. I encourage all Members to continue their support for Bangladesh's efforts; Bangladesh's reform efforts need and warrant the full support of the multilateral trading system.