RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BOP/R/60
18 March 2002
(02-1372)
Committee on Balance-of-Payments Restrictions
REPORT ON THE CONSULTATIONS WITH BANGLADESH
1. The Committee resumed consultations with Bangladesh on 12 December 2001 and again on
27 February 2002 under the Chairmanship of Ambassador Hernando José Goméz (Colombia).
2. The Committee had before it the following documents:
WT/BOP/R/58 Report on the Consultations with Bangladesh
(13 September 2001)
WT/BOP/R/57 Report on the Consultations with Bangladesh
(23 January 2001)
WT/BOP/N/54 and Corr.1 Communicati on from Bangladesh (22 May 2001)
A. OPENING STATEMENTS
3. The statements by the representative of Bangladesh are attached as Annex I and II.
B. DISCUSSION IN THE COMMITTEE
4. In December, the representative of Bangladesh  indicated that sugar would be added to the
phase-out plan with a proposed date for elimination of restrictions as of 1 July 2005.  One member
suggested that further details on how the phase out for sugar would be operated would be an
appropriate signal of a commitment to progressive liberalization; another as to whether the approved
phase-out plan was on schedule.  The representative of Bangladesh also indicated that his Governmentwould be submitting information with respect to restricted products not included in the phase-out plan
within a short period of time.  Members agreed to resume consultations once this information had
been circulated.
5. In February, the representative of Bangladesh informed the Committee that the restrictions
due to be lifted on 1 January 2002 had indeed been removed.  The Committee took note of thecommunication from Bangladesh "Notification under Se ction C of Article XVIII", circulated as G/C/7
on 16 January 2002.  A Member noted that it would be consulting closely with Bangladesh with
respect to this provision as recourse to it was quite untried.  The Committee agreed to  extend balance-
of-payments justification for the remaining restrictions for an additional six months pending approval
by Members of Bangladesh’s recourse to Article XVIII:C.WT/BOP/R/60
Page 2
ANNEX 1
Opening statement by the representative of Bangladesh
Meeting of 12 December 2001
1. I thank you for convening this meeting of the Committee on Balance-of-Payments
Restrictions.  Before I begin my statement, may I thank you and the Members attending today's
meeting for their interest in Bangladesh.  I also take this opportunity to thank the WTO Secretariat,
particularly the officials of this Committee, for their contribution.  The consultations we have hadwith the officials of the WTO have helped to clarify issues, and have facilitated our task.  We greatly
value WTO technical assistance.  The Government of Bangladesh deeply appreciates the interest of
this Committee in assisting us.
2. The BOPs Committee had endorsed the phase-out plan for restrictions on 11 products,
submitted by Bangladesh at its meeting held on 15 December 2000.  At that meeting, we had statedthat Bangladesh would examine the position of the remaining 6 products, on which no phase-out plan
had been submitted.  It was our intention, at that stage, to ascertain whether any other justification
would be required for those remaining products which till then had been covered by Section B of
Article XVIII.
3. On 24 July 2001, we had considered this matter at the meeting of this Committee.  At that
stage, we had stated that Bangladesh was still evaluating the alternatives that were available under the
framework of the WTO rules.  In our statement, we had elaborated upon the considerations involved
in each of the industries involved.  I had also out lined the interim nature of the Government then in
Bangladesh.  The caretaker Government that was in  charge was mainly occupied with the task of
conducting the elections, which were held on 1 October 2001.  On 10 October, a new Governmentwas sworn in with a clear mandate from the voters.
4. It is now my pleasure to present to you our phase-out plan with regard to one category of
products on which a decision was deferred at the last meeting.  This category is HS Code No. 17.01,
which we generally refer to as "sugar".  All products under this broad category will be covered under
the programme we have chalked out.
5. Our sugar industry uses, as its basic raw material, sugarcane produced in Bangladesh. There
are 15 sugar mills in Bangladesh, employing around 20,000 regular workers and 9,000 seasonalworkers.  Furthermore, a large number of sugarcane growers are directly dependent on the sugar
industry.  All the sugar mills are in the state sector.  As a consequence, the fate of the sugar industry is
of great importance to the Government.  Although th e existing mills are generally unable to meet total
domestic demand, the restrictions on the import of  sugar have been maintained to ease the
unfavourable balance-of-payments situation as well as to give an opportunity to this industry tobecome more competitive.
6. Despite the general restrictions on imports, a limited quantity of sugar is imported subject to
the conditions laid down by the Government from time to time.  Generally, this is in the category of
specialized sugar for the pharmaceuticals industry, for the catering industry or for other food and
allied industry.  Furthermore, when the domestic production falls far below the local demand, theBangladesh Sugar and Food Industries Corporation (a Government entity) is the principal importer.
On specific occasions, imports have also been open to the private sector, particularly when the
domestic prices are unusually high.WT/BOP/R/60
Page 3
7. The Government of Bangladesh is actively pur suing efforts at privatizing the sugar mills.
Successful transfer of the sector into commercial hands is intended to increase the productivity of the
sector and enable it to become internationally competitive.  There are also plans for restructuring,
balancing and modernization of some mills, should the private sector not come forward to take them
over.
8. Within this framework, the Government of Bangladesh is of the view that it is now time to
adopt a clear plan for phasing out the import restrictions.  The existing restrictions will be phased out
by 1 July 2005. It is hoped that within this period, the balance-of-payments situation of Bangladesh
will also improve, allowing greater flexibility to the policymakers.
9. I do hope the WTO Members will find it possible to accept this phase-out plan drawn up by
the Government of Bangladesh.
10. On the other products that were previously the subject of this Committee, I hereby confirm
that we are seeking other justification for the restrictions on imports.  It is the considered view of the
authorities of Bangladesh that balance-of-payments considerations, though relevant, would not
provide sufficient justification for the import restrictions to be maintained.  We remain fully
committed to the WTO rules, and it is our intention to conform fully to the provisions of the law for
addressing our concerns.
11. I would like, once again, to thank you Mr. Chairman, the Members present, and the WTO
Secretariat, for their patience and understanding.  I am confident the Member countries will give
sympathetic consideration to the concerns of Bangladesh, aimed at achieving fuller and more efficient
use of resources in accordance with its economic development priorities.WT/BOP/R/60
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ANNEX 2
Opening statement by the representative of Bangladesh
Meeting of 27 February 2002
1. Thank you for convening the meeting of the Committee on Balance-of-Payments Restrictions.
In some ways this Committee has emerged as one of the most important for Bangladesh.  It is perhaps
the only Committee where Bangladesh has special issues or subjects before it.  Of course, as weparticipate more and more in the rule-based organization, our involvement will increase.  It is
probable that we will soon have another issue before the Committee on Trade in Goods.
2. I wish to give you an outline of some recent developments in regard to matters before this
Committee since the decision reflected in document WT/BOP/N/54 dated 15 December 2000.  In
Anne III of that document, Bangladesh had provid ed a phase-out plan for 11 categories of products.
The phase-out process was supposed to begin from 1 January 2002.
3. I am pleased to inform the Committee that there were two categories of products on which the
phase-out was to have been effective from 1 January 2002.  These products are single phase electric
meters (in complete built-up condition) and the parts and components of electric meters and single
phase electric meters in CKD or SKD condition.  The Government of Bangladesh has withdrawn the
import restrictions for those two categories of products.
4. The balance-of-payments position in Bangladesh is, at present, rather unfavourable.  The
economic slowdown experienced by many of our trading partners has affected us very deeply.  In
recent months, our exports have gone down sharply as a result of depressed demand in the importing
countries.  Our foreign exchange reserves are near an all-time low, and prudence requires that they bebuilt up immediately.
5. Despite this unfavourable environment, the Government has decided to conform to the
commitment made earlier to the BOPs Committee.  In accordance with that commitment, the import
restrictions on these products have been withdrawn.
6. There remains a few more products on which we have provided a schedule for lifting all
import restrictions.  As and when those restrictions are lifted, we will keep the Committee informed of
developments.
7. I thank you and Members of the Committee for your understanding and support.
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