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How Dhaka could benefit from WTO MC13

Published : Wednesday, 21 February, 2024 at 12:00 AM  Count : 507
AKM Asaduzzaman Patwary
The ministerial conference is usually held once in every two years. WTO members congregate to realize their shared interests and trade related benefits amidst of strong negotiation. LDCs and graduating economies have always down sides in sustaining negotiation and reaping more benefits. The negotiation process is always complex and unpredictable. However, countries like Bangladesh having minimum foreign trade and limited trading capacity always endeavour maximum benefits from the multilateral trading system. Since Bangladesh is going through economic graduation led economic transition, the upcoming 13th Ministerial Conference (MC13) is very critical in our current economic context. The 13th MC13 is scheduled in the UAE amidst the globally turbulent time while the world experience shattered supply chain system and dry US Dollar supply with $2.5 trillion global trade shortfall. The repercussion is from Russia and Ukraine war, lethal war in Gaza.

Though Bangladesh has contained most of grave global crises including the covid pandemic, Ukraine and Russia war stress large extent with the dynamic private sector backed by resilient policy support of Government. These crises are holding back the seamless global trade growth with no exception for Bangladesh and holds immense significance in shaping the global trade trend. Against the backdrop of a challenging and declining global trade trend, the conference provides opportunities for nations to navigate complexities and forge agreements. For Bangladesh, impending graduation in 2026 adds an urgency to the proceedings turning MC13 into a pivotal platform to negotiate the interests of Bangladesh. Bangladesh precisely demands sustainable recovery of this stalemate and readiness for next level of economic reality.

Subsequently, Bangladesh may consider extended trade benefits navigating the complexities of e-commerce moratorium, fisheries subsidies, agriculture and food security as unresolved issues from MC12. Besides, Bangladesh emphasizes WTO reforms, effective dispute resolution mechanisms and extended support measures for post-graduation. The multifaceted approach reflects Bangladeshs commitment for a fair and inclusive trade environment. There should be a focus on addressing challenges in trade finance, SME friendly climate, removal of tariff and non-tariff barriers and efficient customs management.

Bangladesh can advocate for potential issues including investment facilitation, climate change and trade and investment-friendly regulation, promoting trade policies that support environmental sustainability and green industrial development and proposing initiatives to mitigate the impacts of climate change. It is unavoidable that continuous development of business climate is inevitable in our local economy to enhance our economic competitiveness. Agricultural subsidies and reform of dispute settlement system are expected to dominate discussions. The EUs Carbon Border Adjustment Mechanism (CBAM) is another focal point, with countries contemplating WTO given potential challenges to the systems compliance. Considering the economic priorities of Bangladesh, the CBAM is not the immediate priority of all priorities.

Our agenda at WTO MC13 centers on several key priorities. Though Bangladesh has now around 25 million CMSMEs which was reported 21.8 million in 2013. Considering this large pie of private sector, CMSMEs, also advocates for streamlined trade facilitation and modern customs measures to enhance efficiency in cross-border trade to facilitate our supply chain system. Another major aspect is the reduction of trade barriers including removal of tariff and non-tariff obstacles hindering the export of Bangladeshi manufactured goods. Therefore, interests of CMSMEs must be incorporated into the agenda. It is essential for effective implementation of Special and Differential Treatment (SDT) provisions advocating for revision to graduation criteria under the GSP. The agenda also includes discussion on digital trade, e-commerce in international trade and advocating for policies that include developing countries in the digital economy and broad-based service sector can be an essential part.

Another significant discussion agenda is to cut of tariff and non-tariff barriers on industrial and primary products under NAMA. NAMA negotiations at the 13th MC hold significant implications for developing countries including Bangladesh. NAMA encompasses manufacturing, fuel, mining, fish and forestry products, constituting 90% of global merchandise exports. Considering the current broken global supply chain, reduction of tariff hike, lowering NTBs are needed to benefit all partners of global trading system.

In view of our contemporary economic state, Bangladesh can leverage support under WTO NAMA framework employing non-trade distorting measures under the Green Box. The Doha Declaration 2002 underscored the NAMA deal is expected to improve market access condition globally fostering more secure and equitable trade for developing countries including Bangladesh. From the DDA, LDCs were given 31 S&DT though there are 120 different special treatments for LDCs. Subsidies and Countervailing Measures (SCM) agreement under the Amber Box subsidies with less stringent notification requirements can be preferred. Other issues include investment facilitation, climate change and trade. Strong negotiation is essential to continue TRIPS exemption till 2033 though this remains valid till transitional period considering proper readiness especially SMEs which have limited knowledge on it. For vaccination and medicines for any pandemic like disasters, TRIPS relaxation can be prioritized.

WTO delegates are making progress on a permanent fix for the dispute settlement system. It is worth noting that some countries including India, assert that labour and environmental issues fall outside the scope of trade matters and should be addressed in forums rather than the WTO. Various nations are exploring alternatives to the EU Carbon Border Adjustment Mechanism (CBAM) policy.

Bangladesh is required to prioritise a comprehensive and strategic approach to fulfill its commitments under the WTO agreement especially for the aforementioned agenda. To enhance trade facilitation, Bangladesh may focus on implementing measures to streamline customs procedure, technological advancement, transport, communication and border infrastructure modernisation. Strengthening compliance with sanitary and phytosanitary standards is crucial for quality control of agricultural product export. Improving negotiation skills and potential FTA and EPA may open new avenues for market and economic growth. In addition, rapid implementation of WTO and WCO rules for advanced customs management contribute efficient supply chain system in Bangladesh.

The Agreement on Fisheries subsidies adopted at the MC12 urged member states to eliminate damaging fisheries subsidies which is a threat of fish stock. If this issue cannot receive endorsement of the required number of members, it will be automatically cancelled. Bangladesh has strong stake in the fishery sector. Considering our stake, Bangladesh needs to take more strategic steps as Bangladesh is beyond the criteria in the given clauses as marine fishing is below the level. We are behind in deep sea fishing and fishing labours have huge challenges and demand huge social safety net for their survival. MC12 also agreed to practice of waiving customs duties on electronic transmissions known as the "moratorium on electronic transmissions". The moratorium continues while strengthening discussions on the issue.

The MC 13 may create some scopes enabling our economy to progress and achieve the upcoming economic trajectory in 2026 as this is the utmost priority and game-changing economic transformation. This achievement of Bangladesh having maximum support can be a new milestone for graduating economies under the WTO in future.    

If the economic friendly measures, export diversification and local market readiness remain unrealised, Bangladesh will underperform in EVI, key graduation criteria, and get stuck in a middle-income trap after graduation and not be able to achieve our vision of developed nation by 2041. Taking this into account, a target-oriented smart roadmap is needed to improve export readiness and safeguard the diverse interests of evolving private sector in Bangladesh through smooth transformation of Bangladesh.

The writer is an Ex. Secretary, DCCI



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