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Bali Package

Hope for Bangladesh

A.K.M. Zaid Uddin
HE Ninth Ministerial Conference of the World Trade Organization (WTO) ended on JL December 7 in Indonesia with approval of a significant "BALI Package." 159 member countries came to a consensus that would allow duty-free access of a country's exports to all developed and developi ng countries.
Several important matters were hashed out in the conference, including export of duty free and quota free products to developed nations by LDCs. Bali package incorporated three main matters -trade facilitation, agriculture and cotton, development issues. Preferential rules of origin for LDCs, monitoring mechanism for special and differential treatment, subsidies in agricultural, trade facilitation among the member countries, easing red tape, reducing business cost, and ensuring food security were discussed under three criteria.
Bangladesh demanded four facilities for LDCs. The most important demand was for Duty Free and Quota Free access (DFQF) and waiver of export services to US market. Relaxation of rules of origin got priority as well, which will help 49 countries to identify products as their own and ensure quality in importing countries.
After losing the Generalized System Preferences (GSP) facility, Bangladesh government was criticised by national and international economists. Though GSP facility was for non-clothes products like tobacco, sporting equipments and plastic products, it reduced cost of business to LIS. Bangladesh paid $2 million duty on $35 million goods under GSP in 2012, while 15.3% duty has to be paid for garment products to US market. The problem is that Bangladesh won't get DFQF facility in garments sector to I IS due to staying out of 97% products.
"The benefits to the world economy are calculated to be between $ 400 billion and $1 trillion by reducing costs of trade by between 10% and 15%, increasing trade flows and revenue collection, creating a stable business environment and attracting foreign investment." This is quoted from draft declaration of "Bali package." Actually, WTO is very hopeful of enhancing world business, where LDCs like Bangladesh will get facilities to spread trade over the world.
Another decision of giving DFQF facility to 97% products of LDG countries to developed countries remains unchanged. The countries that are not giving this facility have to give it before the next conference of WTO to facilitate trade of developing countries. So, Bangladesh will be able to take this chance to get free access of 97% products to rich countries by the next summit.
Subsidies in agricultural products are necessary for developing countries. Every developing country' including India can subsidise any product to boost up agricultural production to ensure food security. This will continue for the next four years, and will expand if needed in future. So Bangladesh may subsidise agricultural products that are imported from India on large scale. But there is a limitation on cotton production, which can raise the price of apparel products in Bangladesh. After all, it will help to avoid trade dependency on India and make Bangladesh a food secured country.
There is 1 year to materialise the "Bali package" the WTO president said. In the meantime, Bangladesh needs to take some preparations in this regard. First of all, it should maintain contact with the other 48 LDGs to create pressure on rich countries to follow the decisions of Bali package. Secondly, Bangladesh needs to regain GSP facilities to enhance trade. Another crucial challenge is to ensure secure workplace for garments workers to avoid accidents like 'Rana Plaza' and 'Tazreen fashion' to get facilities in US and ELI markets. This will help to get priority in world market as well.
At the end of the day, it is clear that we need to go a long way for gaining these facilities. Implementation depends on rich countries mostly. Some trade analysts are confused about ensuring of these facilities by WTO for LDGs. After all, we may hope to avail these facilities to increase our trade. We may say someday in the future, after getting these facilities, what WTO President Mr. Azevedo quoted from Nelson Mandela after the historical consensus: "It always seem impossible, until it's done."
The writer is a student of the Department of Development Studies, 6th semester, University of Dhaka.