November 28, 2022

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Study: Bangladesh to lose $6.38bn in export after LDC graduation

Study: Bangladesh to lose $6.38bn in export after LDC graduation

The study was prepared with the data from the World Trade Organization (WTO) on five major export destinations of Bangladesh

The country risks losing export of goods worth $6.38 billion after its graduation from the least developed country (LDC) category, as a result of loss in preferential trade benefits, a study revealed.

In the post-LDC period, the local exporters will also face 8.91% duty and a possibility of losing 26.28% export to the EU because of the LDC graduation, it also said.

The study was prepared with the data from the World Trade Organization (WTO) on five major export destinations of Bangladesh.

Mostafa Abid Khan, former member of Bangladesh Trade and Tariff and Commission, presented the findings of the study at a seminar on the “Export challenges of Bangladesh after graduation from LDC status: options for the private sector” organized by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) at its office in Dhaka.

Khan prepared the study with data from the WTO on five specific markets to estimate Bangladesh’s loss of business because of the challenges of the LDC graduation in 2026.

Apart from the EU, Bangladesh will lose $5.36 million or 42.05% of business to Canada where the local exporters will have to face 14.47% duty.

Similarly, the country will lose $388.12 million or 30.53% trade with Japan where the local exporters will face 8.89% duty in the post LDC period.

In Korea, Bangladesh will face 7.94% duty and lose business worth $87.78 million or 27.53% of the total annual export to Korea.

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In China, there is a possibility of losing $76.55 million or 8.29% of total export because of 2.96% duty on Bangladeshi goods.

In New Zealand, the local exporters will have to face 4.62% duty and lose $10.13 million or 11.90% export in a year, the study also said.

Md Jashim Uddin, president of FBCCI, has called for equal opportunities for all industries in the country without identifying a few sectors as priority sectors for export diversification and capacity building.

The export sector will face the most challenges as a result of the passage of the LDC. Therefore, all sectors need to be given equal benefits to enrich exports, he also said.

Uddin also called for permanent registration without the need for renewal and opportunity to set up industries only through land, environment, building, fire and tax certificate, launching one-stop service.

Dr Ahmad Kaikaus, principal secretary to the prime minister’s office, said that the pace at which Bangladesh is advancing will change the calculations made by various organizations during the last four years.

Negotiations are underway with the WTO to ensure that duty-free market facilities continue for at least six years after the LDC’s passage. However, there is no alternative to a free trade agreement to maintain long-term export and trade potential, said commerce secretary Tapan Kanti Ghosh.