WORLD TRADE
ORGANIZATIONG/C/7
16 January 2002
(02-0198)
Council for Trade in Goods Original:  English
NOTIFICATION UNDER SECTION C OF  ARTICLE XVIII OF THE GENERAL
AGREEMENT ON TARIFFS AND TRADE 1994 AND THE DECISION OF 28 NOVEMBER
1979 ON SAFEGUARD ACTION FOR DEVELOPMENT PURPOSES1
BANGLADESH
The following communication dated 21 December 2001, has been received from the
Permanent Mission of Bangladesh.
________________
1. This notification is made pursuant to Article XVIII, paragraph 14 of GATT 1994.
2. The Government of Bangladesh hereby notifies that, as Governmental assistance is required to
promote the establishment of particular industries wi th a view to raising the general standard of living
of its people, and in light of the special difficulties faced by particular industries, it proposes to invoke
section C of Article XVIII of the General Agreement on Tariffs and Trade 1994 and the Decision of
28 November 1979 on Safeguard Action for Developmen t Purposes with regard to certain measures
affecting the products listed below.  It has also been ascertained that no measure consistent with other
provisions of this Agreement is practicable to achieve that objective.
Items for which the Government of Bangladesh seeks Article XVIII:C cover
Srl H.S. heading
NumberH.S. Code
NumberDescription of items Proposed measure
1. 01.05 All H.S. Codes Chicks except for "parent stock" and "grand-parent
stock"Restrictions on imports, unless
specifically permitted by theGovernment
2. 04.07 0407.00 Eggs except "hatching eggs" Restrictions on imports, unless
specifically permitted by the
Government
3. 48.19 All H.S. Codes All cartons except (1) Outer carton:  system which is
used in State Express 555 cigarettes;  and (2) Alltypes of carton except laminated inner carton used
for export of all frozen food including shrimpsRestrictions on imports, unless
specifically permitted by the
Government
4. 25.01 All H.S. Codes (a) Common salt, except table salt.
(b) Table salt.Restrictions on imports, unless
specifically permitted by the
Government
3. In the light of the objective of achieving fuller and more efficient use of resources in accordance
with its economic development priorities, Bangladesh wishes to seek the concurrence of Members to
                                                     
1 BISD 26S, pp. 209-210 (L/4897)G/C/7
Page 2
resort to the provisions of Article XVIII, Paragra ph 3 and Section C, as interpreted by paragraph 1 of
the Decision on Safeguard Action for Development Purposes, for the four products listed above.
4. Bangladesh belongs to the group of least-developed countries and its GDP per capita in 1998/99
was only $345.  The country is vulnerable to natural disasters, including periodic flooding and
cyclones.  A major natural disaster may wipe out as  much as 5-8% of the country’s GNP for the year,
and set back her developments efforts.  The global worming that is expected, and its associated sea
level rise, will have severe consequences and may make millions ecological refugees.  These factors,
over which its authorities have no control, highlight the very adverse circumstances in which the
country undertakes its development efforts.  In the last decade, despite the adverse circumstances, the
country has performed well and has maintained reasonably high growth rates.
5. The very magnitude of the problems, particularly with high population density, make the task of
development daunting.  The unemployment rate in Bangladesh is about 20 percent, whileunderemployment or disguised unemployment is much higher, and employment opportunities are
particularly rare in rural areas.  The unemployment scenario is associated with poverty, and over 40%
of Bangladesh's population lives below the poverty line.  Despite the very unfavourable environment,
the Government of Bangladesh has continued to pursue trade liberalization, financial sector reform,
and privatization, while maintaining in legislative terms, and in incentives, one of the most liberal
foreign direct investment regimes in South Asia, as noted in the Trade Policy Review of Bangladesh
of 2000.  The Government is committed to continue Bangladesh's integration into the multilateral
trading system.
6. While international trade provides opportunities, it does so for countries that are appropriately
positioned.  For Bangladesh, the creation of new industries and considerable re-structuring ofdomestic industries (where they exist), are necessary to adapt to the new and open environment.
Given the relatively open environment that is being created, the economy of Bangladesh, dependent
on a small range of agricultural products and very few items of export, is particularly vulnerable.  It
has become vital for the country to diversify its production and export bases.  There are some
industries that have the potential of being developed and becoming competitive.  From time to time,the Government would need to identify these industries, extend all possible help to them, and allow
them to develop their competitiveness in the shortest possible time.
7. Some of these industries are currently small-scal e, with limited competitiveness, but on which
poor, vulnerable populations depend for income-generating activity.  In some other cases, the
industries have only recently begun to be developed.  In yet other cases, the establishment of new
branches of production in an existing industry or th e substantial transformation of an existing industry
are involved.  Then, there are cases where substantial expansion of an existing industry supplying arelatively small proportion of the domestic demand are involved.  In each of these cases, a sudden
huge increase in imports of products, similar or closely allied to those produced by them, would
destroy the livelihood of large, poor rural populations dependent on the income from those industries
or actually prevent those industries from being developed.
8. The establishment of new production lines, or the modification and extension of the production
structures of existing industries, in order for th em to become internationally competitive, will take
time.  The Government of Bangladesh therefore considers it necessary to assist their development
through the measures outlined in table 1 and described in further detail below.
9. The customs procedures and their administering structures, in Bangladesh, are in need of
upgrading and improvement.  Programmes have been taken up for this purpose, with externalassistance from the World Bank, other multilateral agencies, and bilateral development partners.
Until the proper developed of the regulatory and enforcement procedures, many traditional measures
are not considered feasible.  For instance, the tariff measures that would be feasible in other countriesG/C/7
Page 3
may not work in Bangladesh.  High tariffs are frequently evaded through “smuggling”, incorrect
invoicing, or other means.  For these, and other, reasons the Government of Bangladesh considers that
it is not at present feasible to introduce alternativ e measures, such as increased tariffs, in these
particular cases.  The Government of Bangladesh would also appreciate technical cooperation, from
its partners in the multilateral trading system, to as sist in improving the administrative capacity of its
customs authorities.  Taking into account the objective conditions in the country, and of the limited
capability of the administration to handle alternates, the Government feels that the best course of
action would be to impose restrictions on the import of these products.
10. The measures which Bangladesh proposes to take under Article XVIII:C concern four sectors, as
described below under three separate headings:
Chicks and eggs
11. The agricultural sector is of high importance in Bangladesh as it employs more than 60 percent of
the total labour force while it accounts for about 30 percent of GDP.  It is also the main source of
income and livelihood of around 80 percent of the population, who have a rural base.  In recent years,
the agriculture sector has also generated more than half of the new employment in the country.  The
poultry sector is positioned to make a major contribution to that development.  Much of theagricultural production is in the form of cottage industries and a major source of revenue for many
poor families.  Given the high incidence of poverty, the dense population, the dependence of the
population on the agricultural sector for revenue and the vulnerability to natural disasters, it is not
unusual to find that that food security and the creation of employment opportunities, through the
promotion of a wide range of income generating activities especially in the rural areas, are majorpolicy objectives of the Government of Bangladesh.
12. The poultry sector is, to a large extent, a cottage industry with production at the family farm.  The
production is for own consumption and sale on the local market and not for exports.  Commercial
poultry farming has only begun to be explored from the early 1990s, and is yet in its infancy.  It is
expected that this sector will grow in importance, to provide cheap protein to the large population.
13. The livestock sector has been identified as a key sector, with good potential to create employment
opportunities in rural areas and thereby contribute to the Government’s effort to alleviate poverty.
The Government of Bangladesh has been promotin g the livestock sector since the early 1990s with
the objective of involving the private sector not only in livestock production but also in the production
of poultry feeds, input supplies and in the marketing of livestock products.  Several non-governmental
organizations have also been involved in this sector, and especially in the development of poultry
firms through providing micro credit to small farmers.
14. As an outcome of these policies, an increase in private investment with credit support from
commercial banks and Bangladesh Krishi (Agricul ture) Bank has been recorded.  Over a thousand
NGOs disbursed Tk 10.7 billion  up to June 1999 in the development of the livestock sector, which
accounted for 18 percent of total micro-credit advanced by the NGOs.  The government has taken a
number of policy steps to stimulate the sector, including cash support to livestock farmers, taxconcessions on import of poultry farm equipment and raw material for poultry feeds, facilitating
transportation of improved breeds of poultry chicks and eggs from abroad, while maintaining a ban on
import of chicks and eggs.  In addition, different government agencies have been involved in
delivering free training and advisory services, poultry vaccines and poultry feeds to farmers .  As a
result of the coordinated efforts of the Government  and NGOs, there are signs of excellent growth of
private poultry firms and allied industry in the country.  This sector, as a whole, has recorded an
attractive growth rate of around 8 percent in the recent years.  The production of poultry meats and
eggs has increased significantly, which has also contributed to an improvement in the average
consumption of these items.  An estimated total of about 15,000 private poultry farms (of varyingG/C/7
Page 4
sizes) have been established since early 1990s, creating job opportunities for the rural population.  In
addition, to support the poultry farms a number of poultry hatcheries, broiler and layer farms, poultry
feed mills, poultry vaccine production firms and other supporting industries have been established in
recent years.
15. Given the fact that Bangladesh is a net food importing country, heavily dependent on imports of
food items, the development of livestock production, including chicks and eggs, contributes both to
employment generation and to a reduction of the food import bill.  The Government of Bangladesh
considers that it is necessary to continue with the ban on imports of eggs and chicks until the poultry
farms reach a certain level of efficiency, with adequate support from allied industry, and is capable of
absorbing the shock of competitive imports.
Production of Meats (includi ng poultry meats) and eggs
Item Unit FY
1996-97FY
1997-98FY
1998-99
Meat including
poultry meatMillion ton 0.575 0.620 0.650
Eggs Million
Number2815 3260 3530
Source: Department of Livestock Services
16. Despite the restrictions on imports of chicks an d eggs, the Government has maintained a flexible
approach.  There have been, in fact, some imports as can be seen from the tables below.  The boundtariff rate on chicks is 200% with the exception of one HS 6-digit heading (01.05.11) on which it is
50%.  The applied MFN rates for chicks are either 0% or 25% depending on the type of chicks.  The
bound rate for eggs is 200% and the applied MFN rate is 37.5%.
Imports of chicks into Bangladesh in thousands US dollars
Partner Imports
1997 1998
Canada 82 129
Czech Republic 11 28
Finland 15
France, Monaco 487 385
Gambia 2
Germany 56 56
Hungary 36 51
India 1,915 368
Malaysia 34
Nepal 47 50
Neth. Antilles 10
Netherlands 219 439
Pakistan 1
Togo 2
UK 15
US Miscellaneous Pacific Islands 21
USA, Puerto Rico, US Virgin Islands 62 50
World 2,980 1,657
United Nations Statistics Division Comtrade databaseG/C/7
Page 5
Imports of eggs, including hatching eggs, into Bangladesh in thousands US dollars
(The data below relate to tariff line HS 04.07)
Partner Imports
1997 1998
India 1,486 4,032
Nepal 4
Netherlands 6 45
Pakistan 161
Singapore 4
Thailand 11 621
World 1,511 4,858
United Nations Statistics Division Comtrade database
Cartons
17. The entire manufacturing sector employs about 7 percent of the labour force in Bangladesh and
accounts for about 9 percent of GDP.  Carton manufacturing is an industry, to a large extent
composed of small and medium sized enterprises.  It produces labour-intensive, low quality cartons
primarily for the ready-made garment sector.  Most of the carton manufacturing industry is based on
paper made from locally produced sugarcane waste a nd thus is linked to the cane-growing segment of
the agricultural sector.  It is, therefore, an element in the development of the farm sector as such, aswell as in creating forward linkages between farm ing and industry.  Some of the paper for the
production of cartons is imported, and it is expected that such imports would increase with the
development of the domestic carton industry.
18. Bangladesh has maintained a restriction on imports of cartons.  However, there have been some
imports in recent years as can be seen from the table below.  The applied MFN tariff rates are either
25% or 37.5% depending on the type of carton.  There is no tariff binding for cartons.
Imports of cartons in thousands US dollars
Partner Imports
1997 1998
Chinese Taipei 332
Austria 35 29
Chile 802
China 809 1,604
Hong Kong, China 21 573
Czech Republic 21
Egypt 2
France 217
Germany 1
India 202 394
Indonesia 291 210
Italy 17 1
Japan 35
Korea Rep. 147 1,596
Kuwait 174 1,501
Oceania (not elsewhere specified) 1G/C/7
Page 6
Pakistan 41
South African Customs Union 162
Saudi Arabia 1
Singapore 109 112
Slovenia 517
Thailand 3 1
United Kingdom 736 143
United Arab Emirates 533
United States 45 39
World 4,071 7,367
United Nations Statistics Division Comtrade database
19. Bangladesh is a major manufacturer of readymade textile apparel.  This industry has emerged
barely two decades back, and has developed since then.  It was expected that backward-linkageindustries would be built to meet the demands of this sector.  Some industries, providing inputs used
by this industry, have indeed sprung up.  However,  the fluctuating international trading environment,
and the manner of implementation of the ATC, has not promoted the growth of backward linkage
industry.  Till recently, almost all the cartons required for this industry had been imported.  Gradually,
the packaging industry is being developed and cartons are being produced to meet domestic needs.As most of the enterprises are either new, or are small scale, the Government of Bangladesh considers
that it is necessary to continue with the restrictions till the industry reaches a certain level of
efficiency, with adequate support from allied industry, and is capable of absorbing the shock of
competitive imports.
Salt
20. Sea salt has traditionally been produced in sma ll and cottage industries in the coastal areas of
Bangladesh.  A cluster of low-income poor people in the coastal areas is completely dependent on the
income from salt-production for their livelihood.  These industries employ several million people.
During the last few years, with encouragement from WHO and UNICEF, local salt producers have
invested considerable amounts of capital in salt iodization plants.  Consumption of iodized salt was
made compulsory under law in order to reduce incidence of goiter and other iodine deficiency
diseases.  A complete phase out of the restrictions on salt imports, at this stage, would threaten theexistence of the salt industry with unemployment and increased poverty for the salt-producing coastal
communities.
21. The imports of salt, though restricted through a non-automatic import licencing system, is
frequently opened up to the private sector when circumstances necessitate.  Through such imports, the
Government ensures that salt is available domesti cally at all times.  Of course, specialized and
purified salt is allowed to be imported for specific purposes.
22. The applied MFN tariff rate is 25% and there is no tariff binding.  Continuation of the existing
import régime on sea salt is considered necessary as part of the encouragement and the extension of
this sector, which is not yet at a stage of development where it could be considered as internationally
competitive.G/C/7
Page 7
Imports of salt in thousands US dollars
Partner Imports
1997 1998
Austria 418
Germany 61 117
India 1,904 65
United Kingdom 5 3
World 1,986 604
United Nations Statistics Division Comtrade database
The Notification
23. The WTO Decision on Measures in Favour of Least-Developed Countries states that the rules set
out in the various agreements and instruments and the transitional provisions in the Uruguay Roundshould be applied in a flexible and supportive manner for the least-developed countries.  The Decision
further foresees that, to this effect, sympathetic consideration shall be given to specific and motivated
concerns raised by the Least-Developed Countries in the appropriate Councils and Committees.  This
has been reiterated again and again, lastly at the 4
th WTO Ministerial held at Doha.
24. Bangladesh is of the view that the circumstances of the domestic industry in the categories of
products listed, and described, justify the action intended under this notification.  In light of the
Decision referred to above, and of the special difficulties which it faces as a Least-DevelopedCountry, Bangladesh hopes that Members will appreciate the circumstances that Bangladesh finds
itself in, and will whole-heartedly support the present notification.
__________