Bangladesh mulls retaining China DFQF access, not APTA scheme - Share market analysis of dhaka stock exchange, Bangladesh
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14 January, 2018 10:24 AM Source: New Age
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Bangladesh might opt for duty-free and quota-free market access in China rather than trade preferences under the Asia Pacific Trade agreement as the DFQF scheme offers more benefits for export to the East Asian country.
Officials of the commerce ministry said the government might continue to avail the DFQF scheme following recommendations that came from the stakeholders particularly exporters.
They said Bangladesh Tariff Commission was working on the issue to prepare a study report and the decision would be finalized after receiving the report.
Officials on Wednesday told New Age that China had been allowing duty free market access for almost 97 per cent products from Bangladesh as a least developed country. The country might also avail the trade preferences for 2,372 products under APTA in Chinese market.
But as per condition from China, Bangladesh would have to choose any one of the trade schemes.
APTA is a regional preferential trade platform. The other members of the platform are India, South Korea, Sri Lanka, Laos and Mongolia.
There will be no problem in conducting trade with other countries under APTA even if Bangladesh comes out of APTA with China.
Under these circumstances, commerce ministry asked the tariff commission to prepare a report.
The BTC has already examined the issue and held several meetings with stakeholders including exporters to gather their opinion.
In the latest meeting held on December 12, exporters and representatives of the Federation of Bangladesh Chambers of Commerce and Industry, Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, Bangladesh Frozen Foods Exporters Association and Export Promotion Bureau opined in favour of duty-free market access as it would bring more benefit for exporters.
BTC has now sought written opinion from FBCCI and other associations.
Commerce ministry officials said that margin of preferences under DFQF scheme was higher than APTA scheme though the condition of value-addition is slightly more favourable under APTA.
Exporters could avail 100 per cent duty free benefit for 97 per cent of tariff lines or around 8,000 products with a condition of 40 per cent value-addition under DFQF scheme.
On the other hand, they would be able to enjoy duty benefits ranging from 5 per cent to 100 per cent for only 2,372 items with a condition of 35 per cent value-addition. From these, the country offers 100 per cent duty free market access only for 101 products of LDC countries.
Bangladesh would continue to enjoy DFQF benefits up to 2027 even if it qualifies for graduation from LDC status in 2018, they said.
There is also scope to return for trade benefit under APTA in Chinese market after graduation from LDC, they said.
So, there are scopes to utilise the duty-free trade benefit by increasing the rate of value-addition, they said, adding that currently many exporters cannot avail the benefit due to lower value-addition.
At the meeting, BGMEA representative opined that they would be able to avail the duty-free benefit by fulfilling the condition of 40 per cent value-addition.
Bangladesh exported products worth $ 949 million in the last fiscal year 2016-2017 to China.

 

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