WT/TPR/S/68 Trade Policy Review
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES
(1) INSTITUTIONAL FRAMEWORK
1. The President is the Head of State, elected by Members of Parliament for a term of five years
extendable for another term.  The executive power is vested in the Prime Minister, who selects and
heads the Cabinet;  the Cabinet is collectively responsible to Parliament.  The President appoints the
Prime Minister, who selects Cabinet.  The President's duties are generally ceremonial, and thePresident must act in accordance with the advice of the Prime Minister.
2. Legislative power is vested in Parliament, which comprises 300 members directly elected by
universal adult suffrage, and 30 women members elected by the other 300 members.  Unless dissolved
sooner by the President, Parliament is dissolved on the expiration of the five-year period from the date
of its first meeting, and a general election is called by the President.
3. A proposal for making law in the form of a Bill must be passed by a majority vote of the total
number of Members present in Parliament;  it is then sent to the President for assent.  Upon assent, the
Bill becomes an Act of Parliament.  Money bills cannot be introduced into Parliament without the
recommendation of the President.
4. The highest judicial body in Bangladesh is the Supreme Court, comprising the
Appellate Division and the High Court Division.  The Supreme Court consists of the Chief Justice and
other judges who are appointed by the President.  There are criminal and civil courts nationwide and
in the major cities there are metropolitan magistrates.  Financial matters are dealt with in money loan
courts and bankruptcy courts.
(2) D
EVELOPMENT AND ADMINISTRATION OF TRADE POLICY
(i) Main trade laws
5. The legal framework in the field of foreign tr ade is provided mainly by The Imports and
Exports (Control) Act, 1950;  The Customs Act, 1969;  and  The Foreign Exchange (Regulation) Act,
1947.
6. The Imports and Exports (Control) Act, 1950, empowers the Government to regulate the
import and export of goods and services.  The Import Policy Order (IPO), which governs the
conditions for imports, is formulated under the authority of the 1950 Act on a five-year basis.1  The
Customs Act, 1969, governs the levying and collection of customs duties.  The Foreign Exchange
(Regulation) Act, 1947, governs foreign exchange regulations.  The three Acts are complementary;
the infringement of one may also involve the infringement of another, and be punishable under more
than one Act.2  Other legislation relating to trade is listed in Table II.1.
                                                     
1 Prior to the current IPO 1997-2002, IPOs were formulated biennially.
2 GATT (1992).Bangladesh WT/TPR/S/68
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Table II.1
Main legislation relating to trade
Area Legislation
Customs duties Customs Act, 1969
Import regulations Imports and Exports (Control) Act, 1950;  Customs Act, 1969;  Review, Appeal and Revision
Order, 1977;  Importers, Exporters and Indentors (Registration) Order, 1981;  Licences and
Permit Fees Order, 1985
Customs valuation Amendments introduced to the Customs Act, 1969, in 1997
Preshipment inspection Amendments introduced to the Customs Act, 1969, in 1998
Rules of origin Standard Rules of Origin, 1977
Standards Imports and Export (Control) Act, 1950
Sanitary and phytosanitary measures Imports and Exports (Control) Act, 1950
Marketing and labelling Imports and Exports (Control) Act, 1950
Anti-dumping measures Amendments introduced to the Customs Act, 1969, in 1995
Countervailing measures Amendments introduced to the Customs Act, 1969, in 1995
Safeguard measures Amendments introduced to the Customs Act, 1969, in 1997
Pricing and marketing arrangements Consumer Index
Export regulations Imports and Export (Control) Act, 1950; Customs Act, 1969
Government procurement No legislation
Competition law No legislation
Intellectual property rights Patents and Design Act, 1919;  Copyright Ordinance, 1962;  Trade Marks Act, 1940
Foreign investment Foreign Investment (Promotion and Protection ) Act, 1980
Foreign exchange Foreign Exchange (Regulation) Act, 1947
Banking services Banking Companies Act, 1991
Insurance services Insurance Act, 1938;  Insurance Corporations Act, 1973;  Insurance Rules, 1953
Telecommunications services Telegraph Act, 1887
Air transport services Details not available from the authorities
Maritime transport services Merchant Shipping Ordinance, 1993;  Inland Shipping Ordinance, 1976;  Bangladesh Flag Vessel
(Protection) Ordinance, 1982
Source: WTO Secretariat, based on information provided by the Bangladeshi authorities.
(ii) Formulation and implementation of trade-related policies
7. The Ministry of Commerce (MOC) is primarily responsible for formulating, implementing,
enforcing, and monitoring trade policy matters through the following agencies:  the Bangladesh Tariff
Commission (BTC), the Export Promotion Bureau (EPB), and the Office of the Chief Controller of
Imports and Exports (CCIE).  The task of designing the tariff policy is entrusted to the BTC.  The IPO
is drawn up and enforced by the CCIE.  The Export Po licy is formulated by the EPB.  Unlike the IPO,
which has the status of law, the Export Policy is merely a statement of intent without any legalauthority.  The National Board of Revenue (NBR), under the Ministry of Finance, administers all
taxes, including customs duties and VAT, as well as tax holidays and other tax concessions.  A
number of other ministries and agencies are also involved in the process of formulating and
implementing trade and trade-related policies (Table II.2).
3  Coordination is achieved through inter-
ministerial, cabinet subcommittee, and cabinet meetings.
8. The only major institutional change in the trade-related field since the last Review of
Bangladesh, in 1992, is the strengthening of the powers of the BTC, formerly the Tariff Department atthe Ministry of Commerce.  The Bangladesh Tariff Commission Act of 1992 upgraded the
                                                     
3 For details, please see GATT (1992).WT/TPR/S/68 Trade Policy Review
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Department to an independent advisory body under the auspices of the Ministry, entrusted with more
power in the areas of tariff policy and anti-dumping and countervailing investigations.4  T h e  B T C
recommends tariff levels and other forms of assistance for the protection of industry, particularly with
a view to developing export potential.  The BTC also investigates allegations of dumping and makes
recommendations to the Government for the levying of anti-dumping and countervailing duties.
Table II.2
Ministerial responsibility for trade and trade-related issues
Government Ministry/Agency Area of responsibility
Ministry of Agriculture Agricultural policy, SPS
Ministry of Commerce Import and export policies, WTO coordination, SAPTA and other regional
agreements, insurance services
Chief Controller of Import and Export Registration of importers and exporters
Export Promotion Bureau Export promotion, textile quota administration
Tariff Commission Tariff policy, anti-dumping and countervailing investigations, safeguards
Ministry of Cultural Affairs
Copyright Office Copyright
Ministry of Finance Banking services, subsides
National Board of Revenue Customs, preshipment inspection, customs valuation, tariffs and other duties, tax
holidays and tax concessions, duty drawbacks
Ministry of Industries Industrial policy
Bangladesh Standards and Testing Institute Standards
Bangladesh Small & Cottage Industries Corporation Small and cottage industries
Department of Patent Designs, and Trademarks Patents, industrial designs, and trade-marks
Bangladesh Bank Export finance, banking services, interest rate subsidies
Ministry of Post and Telecommunications Telecommunications services
Ministry of Civil Aviation and Tourism Air transport
Privatisation Board Privatization of state-owned enterprises
Board of Investment Registration of investors (including foreign investment), investment facilities
Ministry of Energy and Mineral Resources Energy policy
Ministry of Shipping Maritime transport
Ministry of Health SPS
Ministry of Economic Planning Five-Year Plan
Bangladesh Export Processing Zones Authority Export processing zones
Ministry of Jute Jute policy
Ministry of Textiles Textile policy
Ministry of Fisheries and Livestock SPS
Department of Supply and Inspection Government procurement
Source: WTO Secretariat, based on information provided by the Bangladeshi authorities.
9. The Ministry of Industries is primarily in charge of the formulation of industrial policy:  the
most recent, the Industrial Policy 1999, lays down the framework for private, public, and foreign
investment in Bangladesh.  The implementation of industrial policy is mainly through the Bangladesh
Export Processing Zone Authority (BEPZA), the Bangladesh Small and Cottage Industries
Corporation (BSCIC), and the Board of Investment (BOI), which are responsible for the registration
of private enterprises and private institutional facilities for investors.
                                                     
4 The strengthening of the capacities of BTC, as well as of MOC, is one of the main objectives of the
World Bank-led Export Diversification Project, which is currently under-way in Bangladesh.Bangladesh WT/TPR/S/68
Page 17
10. The Planning Commission is responsible for all aspects of economic planning and
development, including the preparation of Five -Year Plans and Annual Development Programmes.
The Ministries of Agriculture, Energy, Post and Telecommunications, and Civil Aviation and Tourism
are the chief government agencies responsible fo r the formulation and implementation of sectoral
policy in their respective fields.
(iii) Advisory and review bodies
11. The Import Advisory Committee and the Export Promotion Council review import and export
policies, and make recommendations for new Import Policy Orders and Export Policies.  Both
consultative bodies are headed by the Minister of Commerce and comprise the concerned Ministries
(such as Industries, Finance, Shipping, Agriculture, Fisheries and Livestock, Forestry and
Environment, Health, Labour and Manpower, Textiles, Planning, etc.), private sector representativesas well as academic institutions.
12. The National Committee on Export, headed by the Prime Minister, and a Task Force, headed
by the Minister of Commerce, were established in 1993 and 1994, respectively, to address export
matters.  These committees are responsible for reviewing the export situation, providing necessary
direction, resolving problems, and ensuring better coordination among various governmentdepartments and agencies, as well as the private sector.
13. The National Council for Industrial Development, defines goals, policies and measures to
promote industrial development, and monitors the implementation of industrial policy.  The Council,
previously the Industrial Development Council chaired by the Minister of Industries under the
Industrial Policy 1991, has been upgraded under the Industrial Policy 1999, and is now chaired by the
Prime Minister and attended by various ministers and other government and business representatives.
5
14. Other consultative bodies include:  the Consultative Committee for Industries, headed by the
Minister of Industries, which advises the Government on the problems of the public and private
sectors; the National Board of Revenue Consultative Committee, headed by the Minister of Finance,
which advises on the taxation issues;  and the Advisory Committee on Industry and Commerce, which
advises on the problems relating to commerce and industry.
15. The private sector is closely involved in the formulation of trade policy through its
participation in these advisory committees.  Within the private sector, the Federation of Bangladesh
Chambers of Commerce and Industry, representing all chambers of commerce and industry and
associations of trade and industry in Bangladesh, is the apex body representing the private sector at
the national level.  Separate organizations represent the interests of the jute, ready-made garments,
leather, frozen foods and other manufacturers and exporters in the private sector.  Monitoring andperiodic reviews are also carried out to examine implementation of suggestions received from the
private sector.
6  Academic institutions, such as the Bangladesh Institute for Development Studies, the
Centre for Policy Dialogue, the Bangladesh Economic Association, and the Bangladesh Unnayan
Parishad, are often involved in these trade-related committees.7
(3) TRADE POLICY OBJECTIVES
16. Bangladesh has placed strong emphasis on export-led industrialization since it initiated trade
reform in mid-1980s.  Disenchantment with the import-substitution strategy led to the adoption of an
                                                     
5Ministry of Industries (1999).
6 WTO document WT/LDC/HL/12/Add.1, 24 October 1997.
7 WTO document WT/LDC/HL/12/Add.1, 24 October 1997.WT/TPR/S/68 Trade Policy Review
Page 18
outward-oriented growth strategy, wherein the objective of trade policy was to promote rapid export
growth by reducing and ultimately eliminating the anti-export bias prevalent in the economy.  With
this objective in mind, the import regime has been  continuously liberalized and export incentive
schemes have simultaneously been put in place.8
17. The Fifth Five-Year Plan 1997-2002 defines Ba ngladesh's trade policy direction as a
continuation and advancement of the trade reform initiated in the 1980s.  The Plan calls for "policyshifts … to transform a regulated economy into a market economy" by implementing a wide range of
policy reforms, including, inter alia , "liberalization of imports and streamlining of import procedures,
rationalization of tariffs and elimination of quantitative restrictions to the extent possible, adoption of
a market-oriented flexible exchange rate policy and provision of more effective and transparent export
promotion measures".
9  Development of export-oriented industries has been encouraged though the
increased participation of the private sector and the provision of infrastructure and incentives both to
domestic and foreign investors.
18. More specifically, the Import Policy Order 1997-2002 lays out the following objectives for
import policy:  (i) to make the import policy compat ible with the changes in the world market that
have occurred as result of the signing of the WT O Agreements;  (ii) to simplify the procedures for
import of capital machinery and industrial raw materials with a view to promoting exports;  and
(iii) to ensure growth of indigenous industry and the availability of high quality goods to the
consumers at reasonable prices.10
19. The principal objectives of Export Policy 1997-2002 are:  (i) to achieve optimum national
growth through increased exports to regional and in ternational markets;  (ii) to narrow the gap
between the country's export earnings and import payments through the achievement of the export
targets;  (iii) to undertake timely steps for production of exportable goods at competitive prices with aview to expanding and strengthening existing markets and making inroads into new markets;  (iv) to
take the greatest advantage of the post-Uruguay Round liberalized and globalized international
markets;  (v) to make the country's exportable items more attractive to the market through product
diversification and quality improvement;  (vi) to establish backward linkage industries and services
with a view to using more indigenous raw material s, expanding the product base and identifying and
exporting higher-value-added products;  (vii) to simplify export procedures and to rationalize and
strengthen export incentives;  (viii) to develop an export infrastructure;  (ix) to develop trained human
resources in the export sector;  and (x) to raise the quality and grading of export products up to
internationally acceptable levels.
11
20. The objectives of the Industrial Policy 1999 are listed in Box II.1.
                                                     
8 WTO document WT/LDC/HL/12/Add.1, 24 October 1997.
9 Planning Commission (1998).
10 The Import Policy Order 1997-2002.
11 Export Policy Order 1997-2002.Bangladesh WT/TPR/S/68
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Box II.1:  Objectives of the Industrial Policy 1999
1. To expand the production base of the economy by accelerating the level of industrial investment.
2. To encourage the private sector to lead the growth of industrial production and investment.
3. To focus the role of the Government as a f acilitator in creating an enabling environment for
expanding private investment.
4. To permit public undertaking only in those industrial activities where public-sector involvement is
essential to facilitate the growth of the private sector and/or where there are overriding socialconcerns to be accommodated.
5. To attract foreign direct investment both in export and domestic market-oriented industries to make
up for the deficient domestic investment resources, and to acquire evolving technology and gainaccess to export markets.
6 To ensure rapid growth of industrial employment by encouraging investment in labour-intensive
manufacturing industries including investment in efficient small and cottage industries.
7. To generate female employment in higher skill categories through special emphasis on skill
development.
8. To raise industrial productivity and to move progressively to higher-value-added products through
skill and technology upgrading.
9. To enhance operational efficiency in all remaining public manufacturing enterprises through
appropriate management restructuring and pursuit of market-oriented policies.
10. To diversify and rapidly increase the export of manufactures.
11. To encourage the competitive strength of import substituting industries in catering to a growing
domestic market.
12. To ensure a process of industrialization that is environmentally sound and consistent with the
resource endowment of the economy.
13. To encourage balanced industrial development throughout the country by introducing suitable
measures and incentives.
14. To utilize effectively existing production capacity.15. To coordinate trade and tax policies.16. To develop indigenous technology and to expand production based on domestic raw materials.17. To rehabilitate deserving sick industries.
Source:  Industrial Policy 1999.WT/TPR/S/68 Trade Policy Review
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(4) TRADE AGREEMENTS AND ARRANGEMENTS
(i) World Trade Organization
21. Bangladesh participated actively in the Uruguay Round multilateral negotiations and is a
founding Member of the WTO.  The open and liberal economic and trade policies that the country has
followed gives Bangladesh a vital interest in the effective operation of the strengthened and improved
multilateral trading system.12  Bangladesh believes that strict adherence to the rules by all trading
partners would ensure market access for its exports of goods and services.13
22. On behalf of the least-developed countries (LDCs), Bangladesh has been advocating the
implementation of special and differential treatment in favour of LDCs, and has emphasized the
problems faced by LDCs in the multilateral trading system.  Like other LDCs, Bangladesh has found
it difficult to implement WTO commitments due to the shortage of skills, knowledge and institutionalcapacity.
14  Bangladesh would like to see progress in accommodating the special needs of LDCs in the
coming multilateral trade negotiations.15
23. Bangladesh has taken prompt action to bring its trade-related legislation into conformity with
the WTO Agreements, even though as an LDC it coul d take advantage of longer transition periods.
Although Bangladesh had been "pledged special and differential treatment in the Uruguay Round
negotiations, there is a conscious awareness on the part of policy-makers that following liberal trade
and domestic policies is in the long term interest of the country … instead of postponing the action to
the end of such transition periods, it would be desirable to adopt a phased programme that would
gradually develop and strengthen the capacity of different ministries, departments and agencies to
derive full benefits from the multilateral trading system and to abide by its rules and disciplines."16  In
1996, a study project on the Final Act of the Uruguay Round was established by the Ministry of
Commerce to identify areas where changes had to be made in order to comply with WTOAgreements;  the recommendations of the resulting report have been implemented by the relevant
ministries and have been monitored by the Inter-ministerial Committee.
17
24. Bangladesh amended its Customs Act, 1969, introducing provisions on anti-dumping and
countervailing rules in 1995 and on safeguard rules in 1997.  The Act has also been amended to
introduce transaction values as the basis for customs valuation in 2000.18  A process is also under way
to make the changes necessary to bring Banglade sh's intellectual property right legislation into
conformity with the TRIPS Agreement;  a TRIPS-consistent copyright legislation came into force at
the beginning of 2000, and other IPR legislation is expected to come into force in the next future.19
25. Bangladesh has faced difficulties in meeting its obligations concerning WTO notifications
(Table II.3).
                                                     
12 Ministry of Commerce (1998).
13 Ministry of Commerce (1998).
14 Dhaka Chamber of Commerce and Industry (1999);  and Annex II.1 of this Chapter.
15 Dhaka Chamber of Commerce and Industry (1999).
16 Ministry of Commerce (1998).
17 WTO document WT/LDC/HL/12/Add.1, 24 October 1997.
18 As an LDC, Bangladesh has a transition period of five years, i.e. by 1 January 2000.
19 As an LDC, Bangladesh has a transition period of 11 years, i.e. until 1 January 2006.Bangladesh WT/TPR/S/68
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Table II.3
Notifications to the WTO
WTO Agreement Periodicity Document symbol Comments
Agreement on Textiles and Clothing
Article 3.1 Once G/TMB/N/80 (28.04.95) Remaining quota restriction
G/TMB/N/80/Add.1 (16.02.96)
G/TMB/N/80/Add.2 (12.06.96)
Article 6.1 Once G/TMB/N/24 (06.03.95) Right to use transitional safeguards
Articles 2.6 and 2.7(b) Once G/TMB/N/131 (02.11.95) First integration
Articles 2.8(a) and 2.11 Once G/TMB/N/320 (11.03.96) Second integration
Agreement on Implementation of Article VII of the GATT 1994
Article 20.1 Ad hoc WT/Let/1/Rev.2 (22.05.95) Delayed application of the provisions of the
Agreement on Customs Valuation
Article 20.2
Annex III, para. 2
Annex III, para. 3
Annex III, para. 4
Agreement on Technical Barriers to Trade
Annex 3(c) Once G/TBT/CS/N/92 (28.01.98) Acceptance of the WTO TBT Code of Good
Practice
Source: WTO Secretariat.
(ii) Regional agreements
26. Bangladesh is a member of two regional trading arrangements, the SAARC Preferential
Trading Arrangement (SAPTA), and the Bangkok Agr eement.  Bangladesh also participates in the
Bangladesh – India – Myanmar – Sri Lanka – Thailand Economic Cooperation (BIMST-EC), and the
Developing Countries – 8 (D-8).
27. Members of the South Asian Association fo r Regional Cooperation (SAARC) signed the
SAARC Preferential Trading Agreement (SAPTA) on 11 April 1993, providing for increased market
access among themselves, effective 7 December 1995.  The seven SAARC members are Bangladesh,
Bhutan, Maldives, Nepal, India, Pakistan and Sri Lanka.  The first four countries, designated as leastdeveloped countries under the agreement, are eligible for additional concessions.  While developed
members offer tariff concessions in the range of 10% to 100% of the MFN level to the LDC members,
the LDC members offer concessions only in the range of 10% and 15% to other members.
28. During their first round of trade negotiations, SAPTA members agreed to exchange duty
concessions on 226 items.
20  The second round of trade negotiations, launched in March 1996,
broadened tariff concessions to about 2,100 commodities at the 6-digit HS Code level, and removed
non-tariff barriers on 180 commodities.21  At the third round of negotiations, commencing in
July 1997, the product coverage was further extended to approximately 5,400 items, with tariff
concessions ranging from 5% to 100% of the MFN level.  Bangladesh grants tariff concessions on
237 items at the 8-digit HS level for all the SAPTA members, and additional concessions on 13 itemsfor the three other LDC members (Chapter III).
29. Since 1976, Bangladesh has been a member of the Bangkok Agreement, which is aimed at
achieving trade liberalization among the less developed member countries of the United Nations
                                                     
20 WTO document WT/COMTD/10, 25 April 1997.
21 Ministry of Finance (1998).WT/TPR/S/68 Trade Policy Review
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Economic and Social Commission for Asia and the Pacific.  Bangladesh extends tariff concessions to
India, the Republic of Korea and Sri Lanka on 119 items at the 8-digit HS level (Chapter III).
30. Bangladesh signed the BIMST-EC in 1997, an economic cooperation agreement with India,
Myanmar, Sri Lanka and Thailand.  The agreement is aimed at strengthening economic cooperation in
the region, particularly in areas of trade, investment, transport, communications, tourism, technology,
energy, and fisheries.  The agreement does not involve any preferential trading arrangement.
31. Bangladesh also participates the Developing Countries – 8 (D-8), which includes eight
Islamic countries, namely, Bangladesh, Egypt, Iran, Indonesia, Malaysia, Nigeria, Pakistan, and
Turkey.
(iii) Bilateral agreements
32. Bangladesh has bilateral trade agreements with:  Afganistan, Albania, Algeria, Bhutan,
Bulgaria, People's Republic of China, the former Czechoslovakia, the Democratic People's Republic
of Korea, Egypt, the former German Democratic  Republic, Hungary, India, Indonesia, Iran, Iraq,
Kuwait, Malaysia, Mali, Myanmar, Nepal, Pakista n, the Philippines, Senegal, Sri Lanka, Thailand,
Turkey, Uganda, the United Arab Emirates, the former USSR, Vietnam, and Zimbabwe.  Except for
the agreements on transit trade with Bhutan and Nepal and on border trade with Myanmar, all the
agreements are aimed at promotion of bilateral trade.
33. Bangladesh's preferential trade agreement with Bhutan  accords tariff concessions to Bhutan
on 58 tariff lines at the 8-digit HS tariff level in addition to the concessions available under the
SAPTA (Chapter III).
(iv) Other agreements
34. Under the Generalized System of Preference (GSP), Bangladeshi products currently receive
market access preferences from 17 countries, including Australia, Belarus, Bulgaria, Canada, theCzech Republic, the European Union, Hungary, Japan, New Zealand, Norway, Poland, the Russian
Federation, Slovakia, Switzerland, the United States.
22  According to the authorities, while
Bangladeshi exports, in particular ready-made garments, benefit from the GSP schemes, there are
some problems in utilizing preferences.  For instance, the product coverage of some GSP schemes
excludes the products of export interest to Bangladesh.  Stringent rules of origin criteria andprocedural complexities, combined with frequent ch anges, make it difficult for Bangladesh to derive
benefits under the schemes.
23
35. Bangladesh is a participant in the Global System of Trade Preferences among Developing
Countries (GSTP), and grants tariff concessions to the 47 other signatories on a range of products
(Chapter III).24
                                                     
22 UNCTAD document UNCTAD/ITD/GSP/Rev.1, 1999.
23 WTO document WT/LDC/HL/12/Add.1, 24 October 1997.
24 The 48 member countries of the GSTP are Algeria, Angola, Argentina, Bangladesh, Benin, Bolivia,
Brazil, Cameron, Chile, Colombia, Cuba, Ecuador, Demo cratic People's Republic of Korea, Egypt, Ghana,
Guinea, Guyana, Haiti, India, Indonesia, Iran, Iraq, Libya, Malaysia, Mexico, Morocco, Mozambique,Nicaragua, Nigeria, Pakistan, Peru, the Philippines, Qatar, the Republic of Korea, Romania, Singapore,Sri Lanka, Sudan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Uruguay, Venezuela, Vietnam,Yugoslavia, Zaire and Zimbabwe.Bangladesh WT/TPR/S/68
Page 23
36. As part of the arrangements with the IMF, Bangladesh terminated all barter trade protocols
with Albania, Bulgaria, the Czech Republic, De mocratic People's Republic of Korea, Hungary,
People's Republic of China, Poland, Romania, the Slovak Republic and the former Yugoslavia in
1995-96.
(5) TRADE DISPUTES AND CONSULTATIONS
37. Bangladesh has not been involved in any disput es at the WTO;  nor was it involved in any
dispute settlement procedures under the GATT.  There have been no bilateral disputes outside the
WTO with any of its trading partners since 1992.
(6) FOREIGN INVESTMENT REGIME
38. The Foreign Private Investment (Promotion and Protection) Act, 1980 governs the legal
framework for foreign investments in Bangladesh, providing for non-discriminatory treatmentbetween local and foreign investments, protection of foreign investment from expropriation from the
State,  and ensuring repatriation of profits and the proceeds from sales of shares.
39. Foreign investment is encouraged in all activities in Bangladesh with the exception of the four
industrial sectors exclusively reserved for public investment under the Industrial Policy 1999, i.e.
arms, ammunition, and other defence equipment and machinery;  forest plantation and mechanizedextraction within the bounds of reserved forests;  production of nuclear energy;  and security printing
(currency notes) and minting.
25  The most recent Industrial Policy 1999 added several industries
where foreign investment is explicitly discouraged, namely, ready-made garments, banks, insurance
companies and other financial institutions.
40. There is no limitation pertaining to equity participation by foreign investors;  investments can
be undertaken either independently or through joint ventures, either with local or public participants.
All foreign investments must be registered with one of the three sponsoring agencies:  the BangladeshExport Processing Zones Authority (BEPZA) for in vestment in export processing zones;  the
Bangladesh Small and Cottage Industries Corporation (BSCIC) for investment in small industrial
units;  or the Board of Investment (BOI) for all other private investment.
26  Registration with the
sponsoring agency provides investors with a "one stop service";  this service involves infrastructure
and institutional support services, including pre-investment counselling, electricity, gas, and water andsewerage connection, and telecommunication facilities.  The agencies are also responsible for the
allocation of industrial plots, entitlement to import items on the restricted list, approval of the payment
of royalties, technical know-how or technical as sistance fees, and the appointment of, and repayment
of remuneration to, foreign personnel (Chapter III).
41. Foreign investors enjoy the same incentives as domestic entrepreneurs in respect of tax
holidays, accelerated depreciation allowances, concessional duties on imported capital machinery and
other measures, as contained in the Industrial Policy 1999 (Chapter III).  The establishment of
convertibility of the taka for current account transactions, in April 1994, has facilitated foreign
investment, by eliminating the requirement to ob tain prior approval from the Bangladesh Bank on
current account transactions (Chapters I and III).
                                                     
25 Under the previous Industrial Policy 1991, the list of "reserved industries" also included railways and
air transportation (except air cargo and domestic air transportation).
26 Investment by non-resident Bangladeshis is treated on par with foreign direct investment (Industrial
Policy 1999).WT/TPR/S/68 Trade Policy Review
Page 24
42. Bilateral investment treaties for promotion and protection of investment have been concluded
with Belgium, Egypt, France, Germany, Indonesia, Iran, Italy, Japan, Malaysia, the Netherlands,
Pakistan, the People's Republic of China, the Ph ilippines, Poland, the Republic of Korea, Romania,
Switzerland, Thailand, Turkey, the United Kingdom, and the United States.  Negotiations are under-
way with Austria, the Democratic People's Republic of Korea, the Republic of Egypt, Hungary, India,
Mauritius, Moldova, Oman, and Uzbekistan.27
43. Bangladesh has concluded bilateral agreements for avoidance of double taxation with
Belgium, Canada, Denmark, France, Germany, I ndia, Italy, Japan, Malaysia, the Netherlands,
Pakistan, the People's Republic of China, Pola nd, the Republic of Korea, Romania, Singapore,
Sri Lanka, Sweden, Thailand, and the United Kingdom.  Negotiations are going on with Australia,
Cyprus, Finland, Indonesia, Iran, Nepal, Norway, the Philippines, Qatar, Spain, Turkey, and theUnited States.
28
                                                     
27 Board of Investment (1999).
28 Board of Investment (1999).Bangladesh WT/TPR/S/68
Page 25
Annex II.1:  Trade-related technical assistance
The WTO Ministerial Meeting held in Singapore in December 1996 adopted an  Integrated
Plan of Action (IPA) for the Least Developed Countries (LDCs).  The objective was to facilitate
LDCs' integration into the global trading system through technical and financial support.  This
programme, of which Bangladesh is one of the beneficiaries, offers a global approach to theimplementation of the Uruguay Round Agreements, supply-side constraints, and the strengthening of
LDC's institutional and administrative capacities.
Concomitant with the Plan of Action , it was agreed by six multilateral agencies – the
IMF, ITC, UNCTAD, UNDP, World Bank, and WTO – that an Integrated Framework  (I F) wil l be
drawn up in order to define the nature of trade-re lated technical assistance to LDCs.  Subsequently,
this Integrated Framework  was adopted by the High-Level Meeting (HLM) on Integrated Initiatives
for Least-Developed Countries  organized by the WTO in Geneva in October 1997.  This was later
endorsed by the Boards of the UNDP, World Bank , UNCTAD and IMF.  The principal objective of
the IF is to facilitate LDC integration into the process of globalization through trade-related technical
assistance, which is to be made available by the six agencies involved in the process of designing theFramework.
29  Thus, through the IF, Bangladesh seeks to enhance its competitive strength by
responding to the challenges and opportunities emerging in the evolving global market.
In the context of the IF, in October 1997 the Government of Bangladesh prepared an
assessment of its trade-related technical assistance needs .  Subsequently, the six multilateral agencies
prepared a joint Integrated Response  to this needs assessment.  Also, a joint meeting with the
participation of ministries and agencies of the Government and the six multilateral agencies was held
in June 1999 in Dhaka.  This workshop was instrumental in raising awareness of the IF processamongst the stakeholders.  The Needs Assessment  and the Integrated Response  of the six agencies are
contained in a document subsequently prepared by Bangladesh, entitled "Trade-related Technical
Assistance Projects for Bangladesh", for the Round Table Meeting (RTM), scheduled for
January 2000.
30  This document contains a multi-year programme of trade-related technical assistance
and the relevant information is referred to in this section.
The objectives of the Round Table are four-fold:  (a) to present Bangladesh's strategic
priorities to overcome trade-related constraints;  (b) to provide an occasion for the development
partners of Bangladesh to acquaint themselves with Bangladesh's priorities;  (c) to allow the
development partners to articulate their respective interest in financing and/or providing assistance
and expertise to support the Government in addressing these priorities in trade-related areas;  and(d) to endorse a Multi-year Programme (MYP) of trade-related assistance and to designate
                                                     
29 However, it is to be noted here that application of IF is not limited to the six organizations which
have taken this initiative.  Other organizations such as FAO, and the Common Fund have also shown interest toparticipate in this initiative.  Consequently GOB will explore the possibility of bringing other multilateralorganizations as well as bilateral development partners on board in this process;  GOB will also encourage
private sectors to explore potential areas of partnership with such organizations.
30 The document for the RTM has been prepared under the broad guidelines of the Steering Committee,
which was set up by the Ministry of Commerce to service the needs of the IF, and which included all the majorstakeholders.  The donor agencies provided informa tion on the on-going technical assistance (TA) projects,
which addressed one or more of the trade-related problems.  Similarly, the private sector of the country, throughvarious commodity-specific, sectoral and apex organizations made proposals for technical assistance to
overcome particular constraints.  The document prepared for the RTM meeting is based on (i) the demand of the
various stakeholders as reflected in Bangladesh's Needs Assessment Study, (ii) the project proposals submittedby the concerned agencies and organization, (iii) needs registered in the course of the various inter-ministerialmeetings, and (iv) consultations with the development partners during various meetings, including the launchingworkshop.WT/TPR/S/68 Trade Policy Review
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implementing/executing agencies including from among intergovernmental agencies (in addition to
the six core agencies involved), and bilateral development partners and, where appropriate, the private
sector.
Some of the major constraints identified during the technical assistance needs assessment
exercise can be summarized as follows.
Supply side constraints
- A lack of adequate infrastructure, is perhaps the single most important bottleneck to
the expansion of trade and investment in Bangladesh.  Technical assistance is
required to assist in the infrastructural development, taking into account the
developments in regional cooperation.
- Although the country has an abundant supply of cheap labour, skilled labour is short,
albeit essential in such sectors as leather, electronics and data entry.
- Bangladesh's exports are highly concentrated in few, mostly
natural-resource-intensive products, given the inability to produce goods at
competitive prices, low productivity of labour, lack of adequate skill and appropriate
technology, and inadequate infrastructure.  Furthermore, while Bangladesh has beenfollowing a private-sector-led growth st rategy since the 1980s, there is a lack of
investment in the country.  Assistance to diversify production and exports is required.
Trade promotion and trade support services
- Most of the export-oriented enterprises in Bangladesh are small and medium size,
with limited capacity to undertake market research, to make investment in technology
adaptation, acquisition or to access, collect, store, process and disseminate trade
information.  All these aspects are considered essential conditions for effectivemarket access.
- The lack of capacity to ensure quality and standardization is particularly critical in
export sectors like shrimp, leather, etc. where stringent demands of importers (e.g. in
the EC) in terms of technological adequacy , quality control and hygiene requirements
can deter expansion of production and jeopardize market access.  Other obstaclesinclude a lack of good design, high quality, and attractive packaging, and up-to-date
information relating to consumer preferences in export markets.
- Many enterprises in Bangladesh have neither the in-house capacity to gather the
necessary trade information nor the networking facility to access such information.
Information is a very cost-intensive business and technical assistance in developingan information network is high on the agenda.
- Enterprises in Bangladesh lack in-house capacity for producing products of high
quality that would give the buyers good value for money.  Assistance would be
required to build capacity to go up-market.
- The capacity of trade support institutions in Bangladesh is limited both because of the
lack of resources and also the required expertise to deal with the emerging problems.Bangladesh WT/TPR/S/68
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- An adequately trained national trade cadre for efficient management of the external
trade sector is of crucial importance to Bangladesh.
Market access constraints
Market access issues are becoming increasingly complex and diversified.  The major market
access problems faced by Bangladesh in its most important markets relate to:  (i) non-tariff and
para-tariff barriers;  (ii) stringent quality and standard requirements;  (iii) stringent rules of originrequirements;  and (iv) strict labour and environmental standards.
Constraints in the area of WTO compliance
Membership in the WTO entails compliance w ith the rules, provisions and obligations
contained in the Agreements.  The WTO Agreements are not only complex but demanding, in terms
of their intellectual rigour as well as their institution-building requirements for least-developed
countries.  Hence, to comply with these Agreements, Bangladesh has indicated that it needs technical
assistance for institutional development as well as for human resource development in the area of
trade policy administration and trade facilitation.  More specifically, Bangladesh needs technical
assistance in the following areas to comply with WTO Agreements:
- to set up focal points in the relevant ministries to carry out work related to the WTO
Agreements.  This will, inter alia,  ensure that notification and other WTO obligations
are fully implemented;
- to strengthen the Ministry of Commerce and its affiliated agencies (like the
Bangladesh Tariff Commission and the Export Promotion Bureau) to enhance their
capacities to effectively handle the increasing volume of WTO–related work;  and
- to train officials in relevant ministries, particularly the Ministry of Commerce, and
the various chambers of commerce and industry, to enable them to fully comprehendthe complexities of the WTO Agreements and thereby deal with them effectively.
Bangladesh needs to design and put in place an on-going mechanism of monitoring and
responding to the implications of rules gove rning all the WTO Agreements, i.e. market access,
agriculture, anti-dumping, subsidies, customs va luation, rules of origin, safeguard measures, TBT,
SPS, services, TRIPS, TRIMs, environment, etc.
Liberalization commitments, tariff reductions, and removal of QRs by Member countries have
increased access to export markets both for industrial and agricultural products.  In order to derive the
full benefits of such liberalization, Bangladesh has to develop new export products, satisfy product
standard requirements in importing countries, and obtain market information for different markets,
etc., for which Bangladesh needs technical assistance.
The Agreement on Agriculture is aimed at liberalizing trade in agricultural goods, but this
liberalization in turn is expected to lead to an increase in prices of agricultural goods including
foodgrains.  As a net foodgrain importing country, Bangladesh is likely to be faced with an increase in
its food import bill.  Foodgrain production in Bangla desh would thus have to be enhanced through a
rapid increase in productivity, for which Bangladesh requires technical assistance.
With the continuous liberalization of the trade regime of Bangladesh since the mid-1980s,
local industries face competition from imports.  The Agreement on Safeguards permits a Member
country to resort to safeguard action to restrict imports of a product for a temporary period by eitherWT/TPR/S/68 Trade Policy Review
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increasing tariffs or imposing QRs.  However, a temporary safeguard measure can only be adopted
when it has been established through a properly conducted investigation to determine whether a
sudden increase in exports (both absolute and relative to domestic production) has caused or threatens
to cause serious injury to the domestic industry.  Bangladesh needs technical assistance to establish an
administrative procedure and set-up to conduct such investigations in conformity with WTO rules and
regulations.
It is often alleged by local producers in Bangladesh that foreign suppliers resort to unfair trade
practices, either in the form of dumping or of subsidized exports.  The Agreement on Anti-Dumping
permits the importing country to levy anti-dumping duties on products that are being dumped,
provided the conditions contained in the Agreement are met.  Similarly, the Agreement on Subsidies
and Countervailing Measures allows the Government of the importing country, under certainconditions, to levy countervailing duties on imported goods.  Bangladesh needs technical assistance to
set up and strengthen the administrative machinery in order to apply these agreements.
Furthermore, Bangladesh needs technical assistance in the area of customs valuation to bring
its legislation and practice into line with the obligations laid down in the Agreement on Customs
Valuation.  The transition period for the effective application of the Agreement ended for Bangladesh
on 1 January 2000.
The Agreement on Technical Barriers to Trade lays down international rules relating to
product standards as well as technical regulations, compliance is mandatory.  While Bangladesh's
exports would have to meet these standards and technical regulations to gain access to foreign
markets, particularly in the developed countries, it has neither the expertise nor the institutional
machinery to meet these standards and technical regulations requirements.  Nor does it have the
capacity to effectively operate an enquiry point.  This would therefore be another area in whichtechnical assistance needs to be provided.
The Agreement on Sanitary and Phytosanitary Measures specifies principles and rules that
Member countries must follow in applying SPS regulations to imported and exported products in
order to protect human, animal, and plant life or health from the risk of disease.  Agricultural exports
from Bangladesh, like tea, jute, shrimps, frozen food, vegetables, etc. must comply with sanitary and
phytosanitary regulations in the importing countries.  Hence, information on the regulations
applicable in Bangladesh's export markets has to be disseminated to exporters, and enquiry points
must be set up.  Technical assistance is required in these areas.
The Agreement on Trade-Related Aspects of Intellectual Property Rights, inter alia,  lays
down standards for intellectual property rights relating to patents, copyright and related rights,trade-marks, industrial designs, layout designs of integrated circuits, undisclosed information,
including trade secrets, and geographical indication, including appellation of origin.  While
Bangladesh has an 11-year transitional period (i.e. up to 1 January 2006) to meet the obligations under
this Agreement, significant changes would have to be made in the existing national legislation to
bring it into conformity with the provisions of the Agreement on TRIPS.  Technical assistance isrequired both for reviewing and suggesting changes in national legislation and regulations relating to
the protection of intellectual property rights. Furthermore, the administrative machinery required for
enforcement of intellectual property rights needs to be put in place.
The provisions of the General Agreement on Trade in Services do not impose any mandatory
obligations on Bangladesh to make any major changes in its policies in the services sector.  However,
Bangladesh's services sector is weak and inefficient.  In order to be able to face competition fromBangladesh WT/TPR/S/68
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foreign suppliers, the sector needs to be strengthen ed.  It is in this effort that Bangladesh would
require technical assistance.
Bangladesh also needs to firm-up its position as regards new issues, including areas that are
part of the new trade agenda.  Development of expertise relating to trade-related processes and
documentation is also an important area where Bangladesh will need technical assistance.  Another
area where there is serious lack of expertise relates to Bangladesh's participation in the DisputeSettlement Body (DSB) of the WTO.  Harnessing skill and developing human capital in trade-related
law and litigation, needs to be given high priority when designing technical assistance programmes.