December 23, 2005EconomyForeign Affairs

The remaining 3 percent

Bangladesh’s textiles may still face US and EU tariffs

This is an archived blog post from The Acorn.

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.

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