WT/TPR/S/270 Trade Policy Review 
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II. TRADE POLICY REGIME 
(1) GENERAL INSTITUTIONAL AND LEGAL FRAMEWORK  
1. Bangladesh has a parliamentary form of governme nt with the President as the Head of State 
and the Prime Minister (PM) as the Head of Gove rnment.  Executive authority rests with the Prime 
Minister who elects and heads the Cabinet and is accountable to Parliament.  The Constitution 
provides for a unicameral legislature known as the Jatiya Sangsad (or National Parliament).  It 
comprises 350 members of whom 300 are directly elected by adult franc hise and 50 are female 
members elected by the Jatiya Sang sad on the basis of proportional representation. National elections 
are held on a five-year cycle, with the last held in December 2008.1  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.  The count ry is administratively divided into seven divisions 
each placed under a Divisional Commissioner and each di vision is sub-divided into Zilas (districts), 
headed by Deputy Commissioners.  
2. The judicial system in Bangladesh is based on the British model with a Supreme Court made 
up of the Appellate and High court Divisions.  The Supreme Court consists of the Chief justice and 
other judges who are appointed by the President.  Crimin al and civil courts operate at the district level 
and Grameen (village) courts have been instituted.  Courts remain  are backlogged, with cases often 
taking many years to be resolved.  The formation of the Judicial Service Commission to ensure the 
separation of the judiciary and the executive w as announced in 2007 and partial separation of the 
judiciary from the executive has been achieved.   
3. An impediment to investment in Bangladesh is the weak and slow legal system in which the 
enforceability of contracts is, according to the author ities, somewhat delayed.  The judicial system 
does not provide for interest to be charged in tort judgments, and therefore there is no penalty for delaying proceedings.  In the lower courts, wher e cases are first brought, corruption is perceived as a 
problem. 
4. Bangladeshi law allows contracts to refer dis pute settlement to third-country forums for 
resolution.  Dispute settlement is hampered by shortcomings in accounting practices and in the 
registration of real property.  Documents affecting title to real property are sometimes not registered, complicating transfer of ownership and collateral agreements. 
5. Bangladesh is a signatory to the Internationa l Convention for the Settlement of Disputes 
(ICSID) and it acceded in 1992 to the United Nations Convention for the Recognition and 
Enforcement of Foreign Arbitral Awards.  Banglades h is also a party to the South Asia Association 
for Regional Cooperation (SAARC) Agreement for th e Establishment of an Arbitration Council, 
which has been operational since 2010.  A provision of the U.S.-Bangladesh Bilateral Investment 
Treaty permits submission of investment disputes to ICSID for third- party settlement.  The 
Bangladesh Export Promotion Bureau is sometimes helpful in assisting in dispute settlement of 
export-related transactions.  Major Bangladeshi trad e and business associations can also help to 
resolve transaction disputes.  
                                                      
1 In October 2006 the then Government handed over power to a caretaker Government for holding 
national elections within 90 days.  In  the face of political deadlock, howe ver, the military-backed caretaker 
Government declared a state of emergency in the country in January 2007, postponed elections indefinitely and launched a broad-based governance reform programme to inter alia :  reconstitute the Election Commission, 
Anticorruption Bureau and Public Service Commission, and separate the judiciary from the executive and 
prepare credible voter lists.  The caretaker Government  lifted the state of emer gency in early December 2008 
and held peaceful national elections later that month.   Bangladesh WT/TPR/S/270 
 Page 13 
 
 
6. Regarding trade matters, recourse is available to importers and exporters for administrative 
and/or judicial appeal in customs cases.  Any im porter or exporter aggrieved by any decision of an 
officer below the rank of Customs Commissioner ma y appeal to the Commissioner (Appeal).  Any 
person aggrieved by the decision of the Commissi oner (Appeal) or Commissioner of Customs may 
appeal to the Appellate Tribunal, which consists of a technical member (Commissioner of Customs or 
above) and a judicial member.  The authorities also note that a provision for Alternative Dispute Resolution (ADR) has been incorporated into th e Customs Act 1969.  Any case or dispute pending 
before any customs authority or Bangladesh court in respect of a levy, assessment, collection or 
refund of duty and taxes, fines or penalties, or cu stoms valuation issues can be dealt with and settled 
by ADR.  The possibility to file a complaint about an administrative decision or act to an Ombudsman 
was removed when the post was abolished in June 2011.  
(2) F
ORMULATION AND ADMINISTRATION OF TRADE POLICY  
7. A number of ministries and agencies are associated with the process of formulating and 
implementing trade and trade-related policies in Bangladesh.  Coordination is maintained through 
meetings at inter-ministerial, cabinet sub-comm ittee as well as cabinet levels.  According to some 
observers, however, Bangladesh lacks a compre hensive and integrated government trade and 
investment agenda as well as an institutional fo cal point for implementing government policy.2 
(i) Key institutions 
8. The principal responsibility for making trade po licy in Bangladesh is shared between the 
Ministry of Commerce and the Ministry of Fina nce.  Commerce has the lead in shaping the 
Government's multilateral, regiona l and bilateral trade policies, and in dealing with dumping, 
safeguards and countervailing duties.  It does this through the Bangladesh Tariff Commission3, the 
Export Promotion Bureau, and the Office of the Chief Controller of Imports and Exports. The 
Bangladesh Foreign Trade Institute is responsible fo r providing analysis.  A formal WTO Cell within 
the Ministry of Commerce handles WTO and other multilateral trade issues.  The WTO Cell provides secretariat support to a high-powered committee, chaired by the Commerce Minister, and seven 
working groups to deal with functions and activ ities related to WTO issues.  The working groups 
cover:  non-agricultural market access and WTO ru les;  agriculture and SPS measures;  services;  
trade facilitation and customs valuation;  trade and environment;  trade-related technical assistance;  
TRIPs and technical barriers to trade.   
9. The Imports and Exports (Control) Act 1950 em powers the Government to regulate the 
import and export of goods and services.  The Mini stry of Commerce formulates import-export policy 
to guide activities.  It formulat es and issues the Import Policy Order (IPO) and Export Policy every 
three years in consultation with the concerned government agencies, trade bodies and relevant 
research institutes.  Unlike the IPO,  which has legal status, the export policy is a statement of intent 
without legal authority.  
10. The Ministry of Finance (MoF) makes the final decisions regarding tariffs through the 
National Board of Revenue (NBR).  The NBR is th e central authority for tax administration in 
                                                      
2 See for example:  Asia Society Advisory Committee (2010),  and Centre for Policy Dialogue (2012).   
3 The Bangladesh Tariff Commission, an autonomous advisory public institution of the Ministry of 
Commerce, works for the protection of indigenous industr ies facing unfair competition from foreign firms.  Any 
matter relating to the protection of or assistance to domestic industries or the efficient use of resources in any 
industry may be referred to the Commission by the government or the business community for 
recommendations on appropriate course of action, including taking remedial measures against dumping and other unfair trade practices in respect of imports into Bangladesh.  WT/TPR/S/270 Trade Policy Review 
Page 14 
  
Bangladesh and is under the Internal Resources Divisi on (IRD) of the MoF.  Its main responsibility is 
to collect domestic revenue, primarily import duties and taxes, VAT and income tax for the 
Government, as well as administer tax holidays and other tax concessions.  The Customs wing of the NBR is primarily responsible for collection of all duties and taxes at the import stage and for trade 
facilitation, enforcement of government regulations , compilation of foreign trade statistics, trade 
compliance and protection of cultural heritage.  Th e Customs authority collects an estimated 35% of 
the NBR's total revenue. 
11. A number of other ministries and agencies are involved in the process of formulating and 
implementing trade and trade-related policies.  Under the Ministry of Industries, the Bangladesh 
Standards and Testing Institute is the main body on  standards and the Department of Patent Designs 
and Trademarks deals with patents, industrial desi gns and trademarks.  Under the Prime Minister's 
Office, key agencies are:  the Privatization Commi ssion, the Board of Investment, the Bangladesh 
Export Processing Zones Authority and the importa nt Public-Private Partnership Office, which 
maintains close working relations with the Minist ry of Finance.  Government procurement policy 
formulation, coordination, monitoring and impr ovement is under the authority of the Central 
Procurement Technical Unit (CPTU) in the Ministry  of Planning.  SPS matters are handled by the 
Ministry of Agriculture, Ministry of Health and the Ministry of Fisheries and Livestock. 
12. In the area of services, the Bangladesh Bank, cont rolled by the Ministry of Finance, performs 
the main functions of a typical monetary and fi nancial sector regulator including the regulation and 
supervision of banks and non-bank financial institutions, and the de velopment of domestic financial 
markets.  The Securities and Exchange Commissi on exercises regulatory and supervisory functions 
over stock exchanges and merchant banks.  The insu rance industry is regulated by the Insurance 
Development and Regulatory Authority (IDRA) Bangla desh.  Other key service-related ministries are 
the Ministry of Post and Telecommunications, the Ministry of Civil Aviation and Tourism, the Ministry of Shipping and the Ministry of Communications for road and rail transport.   
(ii) Advisory and review bodies 
13. There are a number of  policy consultative bodies with public and private sector participation, 
that help to ensure well-coordinated policy formul ation with positive effects on the performance of 
domestic and export sectors.  The bodies include the Import Advisory Committee and the Export Promotion Council, the National Comm ittee on Export and the National Council  for Industrial 
Development.  According to the Ministry of Co mmerce, the Export Policy 2009-12 was formulated 
on the basis of recommendations of a Consulta tive Committee comprising representatives from the 
main industries and trade associations, research orga nizations, relevant ministries and organizations.  
The Social Compliance Forum for RMG is composed  of representatives from relevant ministries, 
entrepreneurs, associations, workers unions, NGOs, development partners and civil society.  The 
Forum monitors progress on compliance issues in the RMG sector and provides policy advice to the 
Government.  Another example of consultation is  the national committee on reforms of commercial 
laws, which is represented by the private sector, trade associations and think tanks and was involved in preparing drafts of competition law and the Direct Sales Act.  Also, six business promotion councils are in place under public-private partne rship to enhance the capacity and awareness of 
exporters and mitigate supply constraints. 
14. The private sector remains closely involved in the formulation of trade policy through its 
participation in advisory bodies.  The Federati on of Bangladesh Chambers of Commerce and Industry 
is the apex body representing the private sector at the national level. Sector-specific trade associations 
like BGMEA (Bangladesh Garments Manufacturers and Exporters Association) are also included in Bangladesh WT/TPR/S/270 
 Page 15 
 
 
the advisory bodies.  Independent academic instituti ons such as the Centre for Policy Dialogue issue 
papers and often participate in  trade-related policy debates. 
(iii) Main trade laws  
15. The review period has seen important reform s in the legal and regulatory framework 
governing trade and trade-related matters (Table II.1). 
Table II.1 
Main legislation relating to trad e and trade-related activities 
Area Legislation 
Customs duties Customs Act, 1969, curre ntly under review as part of NBR 
modernization. 
Import and export regulations Imports and Exports  (Control) Act, 1950;  Customs Act, 1969;  
Review, Appeal and Revision Orde r, 1977;  Importers, Exporters 
and Indentors (Registration) Order, 1981;  Licences and Permit Fees 
Order, 1985;  Import Policy Order 2009-12;  Export Policy 2009-12. 
Customs valuation Amendments introduced to the Customs Act, 1969 
Preshipment inspection Amendments introduced to the Customs Act, 1969 
Rules of origin Standard Rules of Origin, 1977 
Standards Imports and Exports (Contro l) Act, 1950; BSTI Act 1986; BD 
standards also mentioned in the Import Policy Order;  Bangladesh 
Accreditation Act 2006 
Sanitary and phytosanitary measures Imports and E xports (Control) Act, 1950;  Plant Quarantine Act 
2011; Pure Food Ordinance 1959 as  revised by Food Safety 
Ordinance 1994, Quarantine Ordinance and Pure Food Rules    
Contingency measures 
Agriculture Amendments introduced to the Customs Act, 1969 
Agriculture Research Council Act 2011 
Fish Feed and Animal Feed Act 2010 and Fish hatchery act 2010  
Animal Slaughter and Meat Quality Control Act 2011    
Government Procurement Public Procurement Act 2006 and Public Procurement Regulations 
2008 
Competition law 
Business environment  Competition Law 2012   
Bangladesh Economic Zones Act 2010 National ICT Act 2009  
Intellectual property rights Patent and Design Act 1911;  Trade Mark Act 2009; Copyright Act 
2000, amended in 2005 and Copyright Rules 2006; Drafts of  Patent 
Act, Industrial Designs Act, GI  Act and Utility Model Law in 
progress 
Foreign investment Foreign Investment (Promotion and Protection) Act, 1980;  
Bangladesh Export Processing Zones Authority Act1980;  
Bangladesh Economic Zones Act 2010 
Financial services Banking Companies Act, 1991 
Money Laundering Prevention Act 2012  
Securities & Exchange Comm ission Rules 2006 amended  
Insurance services Insurance Act, 2010 and Insurance Development and Regulatory 
Authority Act 2010 
Telecommunication services Telegraph Act,  1887;  Wireless Telegraph Act 1933;   
Telecommunication Regulation  Act No. 18, 2001; International 
Long Distance Telecommunication Services Policy 2010 
Maritime transport services 
 Tourism 
 Merchant Shipping Ordinance, 1993;   Inland Shipping Ordinance, 
1976;  Bangladesh Flag Vessel (Protection) Ordinance, 1982 
Bangladesh Tourism Board Act 2010, Law on Tourism Protected 
Areas 2010  
 
Source : WTO Secretariat.  WT/TPR/S/270 Trade Policy Review 
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16. Regarding Customs, the NBR's modernization plan seeks to improve the policy content and 
framework of the Customs Act in the context of the national vision of Bangladesh.  The framework 
for SPS measures has been strengthened by the passag e of the Plant Quarantine Act 2011.  There have 
been important changes in the laws and regulati ons governing public procur ement, and a Competition 
Act 2012 has been passed by Parliament.    
17. The Government is progressing in bringing its intellectual property rights laws into 
compliance with the World Trade Organization's Trade-Related Aspects of Intellectual Property 
Rights (TRIPS) Agreement.  The Government enact ed a Copyright Law in July 2000, updating its 
copyright system and bringing the country's copyright regime into compliance with TRIPS.  The 
Government has drafted legislation to implement it s TRIPS obligations with respect to patents and 
design as well as trademarks.  The Amendment of Trademark Act 1940 is unde rgoing inter-ministerial 
substantive review.  The draft Patent and Design Act is ready for legal review by the Ministry of Law, 
Justice  and Parliamentary Affairs.  These amendmen ts are intended to bring the country's intellectual 
property laws into full compliance with WTO TR IPS requirements.  Im plementing regulations, 
however, must also be drafted. 
(3) TRADE POLICY OBJECTIVES  
(i) Vision 2021 
18. In 2009, the Government announced a national policy called Vision 20214, which outlined a 
number of long-term social and economic developm ent goals to be achieved by that year, which 
marks the 50th anniversary of Bangladesh's independence.  The chief objective is for Bangladesh to 
become a middle-income country by 2021, raising  per capita income to US$2,000 from an estimated 
US$755 in 2011, and reducing poverty from 40% to 15%  over the same time period.  The Vision will 
be implemented through the 6th (2011-15) and 7th (2016-20) five-year plans.  Prior to that, the 
Government also adopted the National Strategy  for Accelerated Poverty Reduction (NSAPR)II5 for 
FY 2009/11 as the first phase in implementing Vision 2021.  
19. Vision 2021 calls for a significant increase in GDP growth from 6% to 8% by 2013 and to 
10% by 2017.  In order to achieve these ambiti ous targets, Bangladesh knows it needs to increase the 
amount of revenue from exports, overseas remittan ces and domestic and foreign investment.  At 
present, the country's investment climate is not very  attractive due partly to shortages of power and 
energy and inadequate infrastructure.  In res ponse, the Government aims to increase electricity 
generation capacity to 12,124 MW by 2013.  An impor tant part of the Government response has been 
the rapid launch of a new Public-Private Partners hip programme and Office in 2010 to initiate needed 
investments, as well as the creation of special economic zones to attract FDI.  
20. In terms of exports, Bangladesh's revenues in creased from US$6.5 billion in 2001 to US$16.2 
billion in fiscal year 2010 and almost US$23 billion in fiscal 2011, with readymade garments accounting for the vast majority of exports.  The overall goal is to ensure that goods exports and 
remittance earnings are equivalent to about 38% of  GDP by 2021, compared to an annual average of 
24% for the period 2004 to 2009. 
21. To do this, the Perspective Plan envisages a bigger and more dynamic industrial sector, 
creating an export environment that is broad-based , skills intensive and competitive.  The trade and 
industrial policies of Bangladesh will need to be we ll integrated to support both export promotion and 
rapid industrialisation.  The Plan notes that Banglad esh must ensure strengthened global integration of 
                                                      
4 Planning Commission (2010). 
5 Planning Commission (2009). Bangladesh WT/TPR/S/270 
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the economy by building the necessary supply-side  capacities through raising the competitiveness of 
the external sector.  The aim is to win a larger share for the country in global good and service trade 
and encourage both product and ma rket diversification through inter alia  moving upmarket and 
improving trade facilitation.   
22. The Plan also makes suggestions as to the futu re direction of trade policy reforms, including 
gradually reducing tariffs on imports of final goods with relatively faster reduction of tariffs on 
imports of capital machinery and interm ediate goods.  Specific measures include: 
- Favourable tariff regime for imports of capital a nd intermediate goods will be put in place.  
Selected sectors will be provided with time -bound protection in accordance with industrial 
policies, and to enable import-competing sectors the required adjustment space. 
- To stimulate technology transfer and adoption,  fiscal incentives will be provided to users of 
such technology. 
- Support will be provided towards market diversifi cation so that Bangladeshi products are able 
to make inroads into new markets, including t hose of Japan, and regional markets.  Special 
efforts will be taken to stimulate South-South trade. 
- Initiatives will be taken towards intra-RMG diversif ication by investing in quality promotion.  
Private sector will be encouraged to invest in fashion, design and quality control to facilitate 
upmarket movement.  Textiles should be treated as a thrust sector. 
- Vocational training system will be geared to wards developing the required human resources 
for export-oriented industries and export-oriented  investors so that Bangladesh is able to 
enhance her competitive edge in the global market. 
- Standards and quality of manufactured products and exports will be maintained and further 
improved through enhancement of SPS-TBT assura nce capacities;  the Bangladesh Standards 
and Testing Institution (BSTI) will be strengthe ned in areas of quality assurance, accreditation 
and certification. 
- Export-related institutions including the EPB, BEPZa, SEZs will have adequate support to 
enable them to provide necessary services to exporters. 
- To further strengthen Bangladesh's foothold in the global services market through higher 
remittance earnings, support will be provided th rough streamlining procedures for recruitment 
of overseas workers and by providing credit and other support to migrant workers;  migrant workers' remittances will be provided with a ppropriate support and incentives to encourage 
investment in productive sectors. 
- Maximum effort will be undertaken to take adva ntage of the various preferential schemes and 
market access initiatives originating in  the WTO and provided bilaterally.  
(ii) Import and export policy 
23. Since 2003, the Government has introduced sep arate import and export policies for a three-
year period.  During the review period, there have  been two such three-year periods:  2006-09 and 
2009-12.  Regarding the current policies, the gist and rationale for import liberalization and export 
promotion as stated in Vision 2021 is broadly cons istent with the Import Policy Order 2009-12 and 
the Export Policy 2009-12.
6 
24. The main objectives of the Import Policy Order 2006-09 were to:  keep pace with 
globalization and the gradual development of a mark et economy under WTO rules;  facilitate imports 
of technology to expand the use of modern t echnology;  ease imports for export industries and 
coordinate import policy with industrial policy;  and make available industrial raw materials by 
                                                      
6 Ministry of Commerce (2010). WT/TPR/S/270 Trade Policy Review 
Page 18 
  
withdrawing restrictions.  The IPO relaxed restri ctions on imports of all but 25 items (including 
firearms and hazardous items) as against 131 in th e previous IPO.  The new Import Policy Order 
2009-12 has similar objectives and adds the aim of making a strong base for indigenous exports by 
facilitating backward linkages for export-oriented loca l industries.  The new IPO also provides for the 
import of essential food items, garment accessories and capital machinery without a letter of credit, 
and also for the import of machinery and parts used in industries established under 100% foreign 
ownership. 
25. Export policy has emphasised the need to dive rsify the export base, stimulate higher value-
added exports, improve the quality of exports, develop backward- linkage industries and undertake 
vigorous marketing efforts.  Under the Export Po licy 2006-09 the Government announced different 
incentives and facilities to enhance exports, and id entified sectors to be considered as special 
development sectors.  The Export Policy 2009-12 underscores the need for expanding exports, 
increasing the productivity of export-oriented industr ies and facilitating the overall development of 
the export sector through capacity-building.  In particular, this calls for the increasing involvement of women in trade-expansion activities. 
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
26. Over the past decade, Banglad esh has successfully negotiated several regional trade and 
economic agreements, including the South Asian Fr ee Trade Area (SAFTA), the Asia-Pacific Trade 
Agreement (APTA), and the Bay of Bengal Initiati ve for Multi-Sectoral, Technical and Economic 
Cooperation (BIMSTEC).  Bangladesh has taken steps to strengthen bilateral economic relations with 
India.  As a founding member of the WTO and as a Least-Developed Country (LDC), Bangladesh has 
been an active advocate for LDC interests in WTO negotiations.  Exports to SAFTA and BIMSTEC 
partner countries have remained limited during th e review period, accounting for only 3% of total 
exports in each case.   
(i) WTO 
27. Bangladesh has been a Member of the WTO since 1 January 1995 and applies at least MFN 
treatment to all countries with which it trades.  Ba ngladesh actively participates in the work of the 
WTO, advocating in particular the issues of interest  to LDCs in the multilateral trading system (MTS).  
Since the last review, Bangladesh has served twi ce as the Coordinator of the LDC Group in Geneva, 
in 2007 and 2011.  Greater market access, increased  flexibility in the development of multilateral 
trade rules as well as targeted assistance to tr ade infrastructure are some of the objectives of 
Bangladesh in the WTO.  It subscribes to the view that the trade regime of the WTO, which is more 
responsive to the needs of LDCs, could help LD Cs better integrate into the global economy.   
 DDA negotiations 
28. The main issues of interest to Bangl adesh in the DDA negotiations include, inter alia , duty-
free and quota-free (DFQF) market access with flexib le rules of origin, preferential treatment to 
services and service suppliers of LDCs, transition peri od to comply with WTO Agreements, such as in 
the area of TRIPS, trade facilitation, assistance to bu ild capacity to effectively participate in the work 
of the WTO as well as to tackle supply-side constrai nts, etc.  In addition, as part of the LDC Group, 
Bangladesh has taken a proactive approach in articulating other LDCs interests in the DDA 
negotiations, such as agriculture, preference erosion and reasonable resolution of DAC 
(Disproportionately Affected Country) issues.  Ba ngladesh has extended its support to ending trade 
distorting policies in cotton.   Bangladesh WT/TPR/S/270 
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29. At the 8th WTO Ministerial Conference in December 2011, Bangladesh acted as the 
spokesperson for the LDCs and called for an "ear ly harvest" in terms of (i) implementation of 
Decision 36 of Annex F of the Hong Kong Ministeria l Declaration on measures in favour of LDCs;  
(ii) operationalization of the services waiver;  (iii) an  ambitious outcome for cotton;  and (iv) special 
and differential treatment for LDCs in other areas of the negotiations.7 
30. In the DDA negotiations, Bangladesh has been asking for commercially meaningful DFQF 
market access for all products originating from all LDCs.  Since almost all developed country 
Members of the WTO now provide nearly total DFQF  market access to the LDCs, the prime interest 
of Bangladesh is to secure DFQF market access main ly in the US market.  Bangladesh also attaches 
importance to the need for simple and flexible pref erential rules of origin to facilitate LDC exports.  
On behalf of the LDC Group, Bangladesh made a su bmission on preferential rules of origin in 2011, 
proposing an across-the-board percentage criterion for LDC products.8  The Bangladesh authorities 
believe that rules of origin should reflect the ma nufacturing capacity of the LDCs and the changing 
dynamics of the global production structure. 
31. Bangladesh is predominantly an exporter of non- agricultural products.  In view of its heavy 
reliance on apparel and clothing exports, the negotia tions on non-agricultural market access (NAMA) 
are of critical importance.  While the draft NAMA modalities make provisions for LDCs' market 
access, the uncertainty surrounding the implementa tion of Hong Kong DFQF Decision and the 
proposed treatment of preference erosion in th e draft NAMA modalities, has led Bangladesh (along 
with Cambodia and Nepal) to claim that they are potentially "disproportionately affected countries" 
(DAC) as a result of granting a longer implementation period of tariff cuts on the tariff lines identified 
in the draft NAMA modalities.9  The authorities indicated that they would continue to pursue 
obtaining the inclusion of its important tariff lines for DAC treatment, so that tariff reduction on those 
lines is done in accordance with th e normal implementation period.10  Another area of concern to the 
trade community are sectoral initiatives of the NAMA negotiations, which could harm export interests of LDCs.   
32. Bangladesh takes an active interest in the servic es negotiations, in particular the liberalization 
of market access for sectors, and modes of supply of export interest to LDCs.  It has been seeking preferential market access for LDC services and service suppliers, in particular temporary movement 
of natural persons supplying services under mode 4.   In 2003 Bangladesh was instrumental, in the 
adoption of the modalities in the services negotiations  for the special treatment for LDCs.  (document 
TN/S/13) and more recently in the a doption of the services waiver by the 8
th Ministerial Conference 
of the WTO (document WT/L/847).  It will continue to attach priority to enhanc ing its participation in 
services trade, including through the operationalization of the services waiver. 
33. Although Bangladesh did not individually submit any proposal in the area of trade 
facilitation, it closely follows the developments in  this field of negotiations.  A trade facilitation 
needs-assessment workshop was held in Bangladesh in  2007, with assistance from the IMF, the World 
Bank and the WTO.  This exercise provided an opportunity to identify the degree of compliance, as well as the gaps that need to be addressed, to the po ssible disciplines that might emerge as a result of 
the conclusion of trade facilitation negotiations.  A T ask Force on Trade Facilitation, set up to develop 
a national position, meets periodically.   
                                                      
7 Declaration of LDC Trade Minist ers' meeting (WT/MIN(11)/13). 
8 The proposal is contained in document TN/CTD/W/30/Rev.2. 
9 The latest version of the draft modalities for NAMA is contained in TN/MA/W/103/Rev.3. 
10 A number of Members have considered that slow pace of liberalization propo sed for some identified 
tariff lines would make them disproportionately affected. WT/TPR/S/270 Trade Policy Review 
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 Other WTO issues 
34. Bangladesh champions the cause of various sp cial and differential (S&D) instruments, 
including longer implementation periods to allow LDCs to comply with WTO rules and disciplines, 
together with the provision of technical assist ance and capacity building.  Bangladesh, along with 
other LDCs, have been granted an extension of th e transition period under Article 66.1 of the TRIPS 
Agreement until 1 July 2013 for protection of trad emarks, copyright, patents and other IP rights.11  In 
preparation for the 2011 Ministerial, Bangladesh s ubmitted a proposal with a view to further extend 
the transition period for the implementation of the TRIPS Agreement.  As a result, trade ministers 
invited the TRIPS Council to give full consideration to requests for further extension of the transition 
period under TRIPs Agreement.12 
35. Pursuant to the 2005 decision on extension of the LDC transition period, Bangladesh 
submitted its priority needs for technical and fi nancial cooperation in 201 0 (IP/C/W/546).  Despite 
longer implementation periods available to LDCs, Bangladesh is taking action to bring its trade-
related legislation into conformity with WTO Ag reements (see chapter III).  The authorities recognize 
the need for strengthening its institutions, with greater dissemination of IP awareness among all 
stakeholders, thereby benefiting from TRIPS provisions.   
36. Bangladesh attaches high importance to the accession of LDCs to the WTO and recently 
submitted a proposal with a view to further st rengthening the LDC-accession guidelines adopted in 
2002.13  Following a Decision taken at the 8th WTO Ministerial Conference in 2011 (WT/L/846), the 
General Couoncil adopted the Decision on accession of LDCs (WT/L/508/Add.1) which contains a 
new set of guidelines to facilitate the accesssion process of LDCs. 
 Dispute settlement  
37. During the period under review, Bangladesh has not  been involved in any dispute settlement 
cases.   
 Notifications 
38. Bangladesh has made a number of notifications  during the review period.  The acceptance of 
the protocol amending the TRIPS agreement was no tified in December 2006.  Under the Balance of 
Payment provisions of the GATT 1994, Bangladesh notif ied the removal of all restrictions on salt and 
eggs imports, in 2007 and 2010 respectively (WT/BOP/N/ 64;  WT/BOP/N/73).  Data in the Integrated 
Database are available up to the year 2009.  The au thorities have indicated that they will soon submit 
more recent data.  An overvie w is provided in table II.2. 
                                                      
11 TRIPS Council Decision contained in IP/C/40.  This Decision came in addition to the earlier 
Decision taken in June 2002, pursuant to the Doha Declaration, to extend the transition period for LDCs until 
1 January 2016 for certain ob ligations with respect to  pharmaceutical products. 
12 WTO Document WT/L/845. 
13 The LDC accession proposal is co ntained in WT/COMTD/LDC/W/52. Bangladesh WT/TPR/S/270 
 Page 21 
 
 
Table II.2 
WTO notifications during the review period 
Agreement Requirement/content Periodicity WTO document and date 
(latest document if recurrent) 
Agreement on Agriculture  
Article 18.2 
 
Article 18.2 Table DS.1,2,4,5 and 9 - Domestic 
Support 
Table ES.1 - Export subsidies Annual 
 
Annual G/AG/N/BGD/3, 4 May 2011 
 
G/AG/N/BGD/4, 4 May 2011 
Agreement on Implementation of GATT Article VI of the GATT 1994 (Anti-dumping) 
Article 16.4 
 
 Article 16.4 
 
 Article 16.4 
 
 Article 18.5 
 Semi-annual reports of anti-dumping 
actions (taken within the preceding six  
months) Semi-annual reports of anti-dumping 
actions (taken within the preceding six  
months) Semi-annual reports of anti-dumping  
actions (taken within the preceding six  
months) Laws and regulations relevant to the Anti- 
dumping agreement Semi-annual 
 
 Semi-annual 
 
 Semi-annual 
 
 Ad hoc G/ADP/N/119/Add.1/Rev.3, 
24 April 2006 
 G/ADP/N/153/Add.1, 
17 April 2007 
 G/ADP/N/132/Add.1/Rev.3, 
1 May 2007 
 G/ADP/N/1/BGD/1/Corr.1*, 
4 May 2007 
General Agreement on Tariffs and Trade (GATT) 1994 
Paragraph 9 of the 
understanding on 
Balance-of-Payments 
Provisions of the GATT 1994 Paragraph 9 of the 
understanding on 
Balance-of-Payments Provisions of the GATT 
1994 Withdrawal of all import restrictions on 
salt 
 
  Withdrawal of all import restrictions on 
eggs Ad hoc 
 
 
  Ad hoc WT/BOP/N/64,  20 April 2007 
 
 
  WT/BOP/N/73,   
19 February 2010 
General Agreement on Trade in Services 
Articles III:4 and IV:2 Contact and e nquiry points Within two years from 
entry into force of WTO, 
then changes S/ENQ/78/Rev.11,  
26 October 2009 
Agreement on Import Licensing Procedures  
Article 7.3 Replies to questionnaire to import 
licensing procedures Annual for questionnaire G/LIC/N/3/BGD/3,  
29 September 2006 
Article 7.3 Replies to questionnaire to import 
licensing procedures Annual for questionnaire G/LIC/N/3/BGD/4,  
5 October 2007 
Agreement on Subsidies a nd Countervailing Measures 
Article 25.11 Semi-annual report on countervailing  
duty actions Semi-annual G/SCM/N/113/Add.1/Rev.3, 
24 April 2006 
Article 25.11 Semi-annual report on countervailing  
duty actions Semi-annual G/SCM/N/153/Add.1, 
18 April 2007 
Article 25.11 Semi-annual report on countervailing  
duty actions Semi-annual G/SCM/N/130/Add.1/Rev.3, 
1 May 2007 
Agreement on Trade-Related Aspect s of Intellectual Property Rights  
Article 63.2 Laws and regulations Once, then changes IP/N/1/BGD/2, 11 April 2008 
Article 69 Contact points Once, then changes IP/N/3/Rev.9/Add.4,  
11 April 2008 
Paragraph 5 Acceptance of the Protocol of the TRIPS 
agreement Ad hoc WLI/100,  18 March 2011 
Understanding on the Interpretation of Article XXIV of  the GATT 1994, Article V of GATS, Enabling Clause 
Article XXIV:7(a) 
Article V:7(a) Paragraph 4(a) Enabling clause - integration 
Regional trade agreement  Ad hoc WT/COMTD/N/26,  
24 April 2008 
Table II.2 (cont'd)  WT/TPR/S/270 Trade Policy Review 
Page 22 
  
Agreement Requirement/content Periodicity WTO document and date 
(latest document if recurrent) 
Decision on notification proce dures for quantitative restrictions  
BISD 32S/92-93 Quantitative restrictions  Biennial G/MA/NTM/QR/1/Add.10, 
28 March 2006 
Agreement on Technical Barriers to Trade 
Article 15.2 Implementation and administration of the 
agreement on technical barriers Ad hoc G/TBT/2/Add.88 
Notification on Integrated Database (BISD 34S/66) 
BISD 34S/66 Tariff data for unbound items and import 
data for bound and unbound items Annual Latest data available 2008 
 
* In English only 
 
Source : WTO Secretariat. 
(ii) Regional agreements 
39. Bangladesh is party to a number of regional economic and trade coopera tion arrangements, all 
of which aim to promote intra-regional trade throu gh an exchange of mutually agreed concessions.  
All of these agreements are notified under the Enab ling Clause.  Tariff reduction has mainly occurred 
under two arrangements, namely SAFTA and APTA.  Moreover, the scope and magnitude of trade 
under some regional schemes are rather limited.  As  an LDC, Bangladesh receives special concessions 
in all these arrangements.  Acco rding to the authorities, exports to South Asian Association for 
Regional Co-operation (SAARC) countries as a share of total exports remained small and static 
during the review period at 3%, while the share of imports from SAARC grew from 14.9% in 2006 to 17% in 2011.  
 SAFTA 
40. Members of the South Asian Association fo r Regional Co-operation (SAARC) deepened 
trade cooperation through the adoption of the South Asian Free Trade Area (SAFTA) in 2006.  The 
SAARC was founded in 1985 by seven members:  Bangladesh, Bhutan, Maldives, Nepal, India, 
Pakistan, and Sri Lanka.  Afghanistan joined  the forum in 2005, and acceded to SAFTA on 
7 August 2011.  SAFTA was notified to the WTO in 2008.
14 
41. Under SAFTA, tariff liberalization commenced  on 1 July 2006.  All SAFTA countries 
maintain negotiated sensitive lists which do not come  under the purview of trade liberalization but are 
reviewed on a periodic basis with a view to lowe ring the number of products on these lists.  As an 
LDC, Bangladesh has to reduce its tariffs to 0%-5% by 1 January 2016 (instead of 2013).  As of December 2011, Bangladesh had reduced tariffs by around 50% from the applied rate of 
1 January 2006.  On the other hand, non-LDC memb ers of SAARC should have reduced tariffs to  
0%-5% for LDCs by 1 January 2009.  Bangladesh has excluded around 25% of its tariffs from any 
tariff-reduction commitments.  As of December 2011, Pakistan had  reduced and capped all its tariffs 
at 5%, while Sri Lanka reduced its tariffs to the ra nge of 0-5%.  India has unilaterally frontloaded its 
tariff reduction and has provided duty-free treatment on all but 25 tariff lines (alcohol and tobacco).  
SAARC members have further agreed to  downsize their sensitive lists by 20%.
15  Tariff reduction on 
the items withdrawn from the sensitive lis ts would commence on 1 January 2012. 
                                                      
14 WT/COMTD/N/26. 
15 The number of products in the sensitive list a pplicable to LDC member s of SAARC, as of 
December 2011, are as follows :  Afghanistan (858), Ba ngladesh (987), Bhutan (150 ), India (25), Maldives 
(277), Nepal (998), Pakistan (936) and Sri Lanka (845). Bangladesh WT/TPR/S/270 
 Page 23 
 
 
42. The general criteria of SAFTA rules of origin are Change of Tariff Heading (CTH) plus 40% 
value addition for non-LDCs and CTH plus 30% va lue addition for LDC members.  Product specific 
rules of origin apply to 191 items.  Regional cu mulation is allowed under SAFTA, where the regional 
value addition requirement is 50% of which 20% is to be in the final exporting country.  Bangladesh 
and India are the two largest trading members under SAFTA.   
43. The SAARC Framework Agreement on Trade in Services (SATIS) was signed in 2010, and 
ratified by Bangladesh in the same year.  The SA TIS allow SAARC countries to provide preferential 
market access to LDCs.  Although a number of SA ARC members are yet to ratify the Agreement, 
negotiations on schedules of co mmitments have begun.   
 APTA 
44. The 1975 Bangkok Agreement was revised in 2005 and renamed as the Asia-Pacific Trade 
Agreement  (APTA) Asia-Pacific Trade Agreement.  It  is the oldest preferential trade agreement in 
the region aimed at boosting intra-regional trade.  Bangladesh, India, Lao PDR, Korea and Sri Lanka 
are its founding members, with China acceding to the Bangkok Agreement in 2001 .  Mongolia is in 
the process of acceding to APTA.  In the APTA, Ba ngladesh has offered tariff concessions on a small 
number of tariff lines (around 3.4%) of its tariff with an average margin of preference of 14%.16 
45. Since the entry into force of APTA, three rounds  of negotiations have been completed.  The 
third round, which entered into force on 1 September 2006, led to tariff concessions among 
participants on more than 4,00 0 items, and on an additional 587 products that were offered 
exclusively to the LDCs.  A fourth round is un der way to deepen the concessions and widen the 
coverage of preferences to at least 40% of the number of tariff lines of each member, and at least 20% 
of  the value of bilateral trade.  At present, Ch ina offers concessions on the largest number of products 
(1,697) followed by the Republic of Korea (1,367 ) and both offer tariff concessions on products of 
export interest to Bangladesh such as jute goods , leather and leather products.  Bangladesh made 
concessions on 209 products, which include products  such as coconut, machinery and chemicals;  
India offers tariff concessions on some 570 items, and two of Bangladesh's major export items (Hilsha 
fish and Jamdani saree) benefit from duty-free access to India under APTA concessions.  
46. The general criterion of APTA rules of origin is 45% value addition fo r non-LDCs, while the 
value addition threshold for LDCs  is 35%.  Regional cumulation is  allowed under APTA where the 
regional value addition requirement is 60% for non-LDCs and 50% for LDCs.   
47. The fourth round of negotiations under APTA was launched in October 2007, extending into 
areas beyond traditional tariff concessions in order to deepen trade cooperation and integration.  
Under this round, framework agreements on trade in  services, trade facilitation and investment have 
been signed by the parties, and are awaiting ratifica tion.  In addition, APTA members are exchanging 
information on non-tariff measures.  Bangladesh  has ratified the Framework Agreement on trade 
facilitation and trade in services.  
 BIMSTEC 
48. Bangladesh is a party to the Free Trade Ag reement under the Bay of Bengal Initiative for 
Multi-Sectoral Technical and Economic Cooperati on (BIMSTEC FTA), which was signed in 2004.  
The other members are:  Bhutan, India, Myanmar, Nepal, Sri Lanka and Tha iland.  BIMSTEC parties 
have finalized three agreements, namely on trad e in goods;  on dispute settlement procedures, and 
mutual cooperation on customs matters, but they are yet to be signed by the members.  Although the 
                                                      
16 WT/COMTD/62/Add.2, 7 March 2008.  WT/TPR/S/270 Trade Policy Review 
Page 24 
  
tariff reduction programme had not begun as of 2011, the rules of origin have been agreed upon.  
Rules of origin for developing members of the fo rum is 35% plus change of Tariff Sub-Heading 
(CTSH), while LDC members enjoy a flexibility of 5 pe rcentage points, i.e. 30% along with change in 
CTSH. 
49. Tariff reduction is likely to cove r substantially all trade in goods , in the form of reduction and 
elimination of tariffs, with more flexibility grante d to LDCs.  Tariff reduction/elimination is divided 
into two tracks:  fast and normal. Under the fast-t rack approach, which is expected to commence in 
2012, tariffs will be eliminated on 10%  of all tariff lines of each party within a shorter period.  The 
BIMSTEC free trade ar ea also allows for negative lists, to which no tariff reduction will be granted, 
but will be reviewed periodically.   
 TPS-OIC 
50. The Framework Agreement on Trade Preferential System among the Members States of the 
Organization of the Islamic Conference (TPS-OIC) was adopted in 1990, but entered into force only 
in 2002.  The first round of negotiations under TPS-OIC, including the tariff-reduction programme, 
was completed in 2005 and is laid out in the Pr otocol on the Preferential Tariff Scheme for TPS-OIC 
(PRETAS).  Bangladesh is one of thirteen states that  have ratified the PRETAS.  The rules of origin 
requirement under TPS-OIC has also b een agreed to by the parties, and is now awaiting the required 
ratification for entry into force.  Bangladesh is one of ten member states that have ratified the rules of 
origin.  TPS-OIC rules of origin require 40%  value addition for no n-LDC and 30% for LDC 
members.  Under regional cumulation, the cont ent must be 60% for non-LDC and 50% for LDC 
exporting countries. 
51. The PRETAS covers 7% of total national tariff lin es of each participating state.  While the 
PRETAS has entered into force with the completion of  required ratification, ta riff reduction, which is 
yet to be implemented, will be done according to the following schedule:  (i) above 25% is to be 
reduced to 25%;  (ii) above 15% and up to 25% is to be reduced to 10 per cent;  (iii) above 10% and 
up to 15% is to be reduced to 10%.  LDC members of OIC are given a three-year grace period for the 
tariff reduction of products covere d under PRETAS.  As a result, the above tariff reduction will be 
carried out in six annual instalments by the LDCs while the same reduction will need to be completed 
by developing members of OIC in four annual instalments. 
 D-8 
52. The Developing-8 (or D-8) was established in  1997 to promote de velopment cooperation 
among the following countries:  Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and 
Turkey.  Trade is identified as one of the priori ty areas of cooperation under D-8 to promote intra-
trade among D-8 members, which mainly consists of a select group of OIC member states.   
53. The member countries of the D-8 signed a Pref erential Tariff Agreement (PTA) in 2006.  The 
PTA entered into force in August 2011.  The tari ff reduction programme adopted similar to that of 
TPS-OIC.  The PTA covers tariff reduction for 8 per cen t of all tariff lines for each participating state, 
with tariff rates above 10%.  D-8 members are undertaking necessary measures to implement the following tariff reduction modalities:  (i) tariffs above 25% to be reduced to 25% ;  (ii) tariffs between 
15-25% to be reduced to 15%;  and (iii) tariffs between 10-15% to be redu ced to 10%.  Bangladesh, 
being the only LDC member of D-8, will enjoy a lo nger implementation period than other members in 
the Group.  As a result, tariff reduction will be im plemented over eight annual instalments for LDCs 
compared to four annual instalments for other members. Bangladesh WT/TPR/S/270 
 Page 25 
 
 
 Global System of Trade Preferences (GSTP) 
54. Bangladesh is one of the 43 member states of the GSTP.  The third round of GSTP 
negotiations concluded in December 2010, after si x years of negotiations, launched at UNCTAD XI 
in Sao Paulo in 2004.  The agreement paves the wa y for participating countries, or for any other 
participant to the GSPT wishing to accede to the Sa o Paulo Round, for an across-the-board, line-by-
line, linear cut of at least 20% on at least 70% of their dutiable tariff lines.  Bangladesh did not take part in the third round of negotiations.  However, it took part in the previous two rounds held in 1988 
and 1992 under which some limited concessions  were offered to GSTP participants.   
(iii) Bilateral agreements  
55. Bangladesh has bilateral trade agreements with  43 countries, namely:  Albania, Algeria, 
Belarus, Bhutan, Brazil, Bulgaria, Cambodia,  China, Czech Republic, Egypt, Germany, Hungary, 
India, Indonesia, Iran, Iraq, Kenya, Democratic Peop le's Republic of Korea, Kuwait, Libya, Malaysia, 
Mali, Morocco, Myanmar, Nepal, Pakistan, the Ph ilippines, Poland, Romania, Senegal, Sri Lanka, 
Sudan, Thailand, Turkey, Uganda, Ukraine, the Unit ed Arab Emirates, Uzbekistan, Viet Nam, Zambia 
and Zimbabwe.  All the agreements are general in nature and aimed at promoting bilateral trade. 
(iv) Other preferential arrangements 
56. Under the Generalized System of Preferences  (GSP), Bangladeshi products currently receive 
preferential market access from almost all developed Members of the WTO.  In addition, Bangladesh is eligible for LDC preferential schemes adopted by emerging countries, including China and India.  
 European Union  
57. As an LDC, Bangladesh enjoys duty-free and quota-free access to the EU, mainly through the 
EU's Everything But Arms Initiative (EBA) which w as adopted in 2001.  As of 1 October 2009, the 
EBA has granted DFQF access for all products fro m all LDCs (except arms and ammunitions) as 
transitional provisions for imports of rice and sugar have been fully liberalized.  The EU introduced 
revised rules of origin for the GSP, as of 1 Janua ry 2011, offering further simplification and relaxation 
of rules in favour of LDCs.  In general, the GSP ru les of origin stipulate minimum local value content 
of 30% (mainly manufacturing).  In the case of appa rels, which is the single most important export 
item of Bangladesh to the EU markets, LDCs are now  allowed to use a single stage of transformation 
in many cases (i.e. manufacturing from fabric), instead of the two stages of transformation required by the previous rules.
17   
58. The benefits to Bangladesh from the EU's rules-o f-origin simplification have been immediate.  
Exports of woven and knitted garments to the EU  increased in 2011 (January - August) by 47% and 
35% respectively compared to the same period in th e previous year.  The overall GSP utilization rate 
was nearly 80% in 2010, compared to 65% in 2005.18  The EU remains the largest market for 
Bangladesh, with its share in total exports accounti ng for more than 50% over the last five years. 
 USA and Canada  
59. LDCs receive additional preferences under the U. S. GSP scheme for developing countries.  In 
2009, the US provided duty-free access to 82.4% of its tariff lines.19  The U.S. applies across the 
                                                      
17 The new rules of origin applicable within the frame work of the EU's GSP were notified by the EU in 
April 2011, which has been circ ulated as WT/COMTD/N/4/Add.5. 
18 Figures supplied by Bangladesh authorities on the basis of data from Eurostat. WT/TPR/S/270 Trade Policy Review 
Page 26 
  
board rules of origin criteria, which is minimum lo cal value content of 35% for all products including 
apparels.  Some products of  export interest to Bangladesh are not included in the GSP, such as articles 
of apparel and clothing, footwear, leather products .  As a result, Bangladesh pursues DFQF market 
access to the U.S. market, in particular under the DDA negotiations.   
60. The US is the second largest destination for Bangladesh garment exports.  Importantly, 
Bangladesh is the second largest supplier of woven ga rments to the U.S. (HS Chapter 62).  In 2009, 
imports were registered on 583 tariff lines with impo rt value of US$3.6 billion.  Bangladesh exports 
to the U.S. under preferences are insignificant.  Ne arly 99.6% of Bangladesh exports to the U.S. in 
2009 entered with MFN duty, 4% of which entere d on an MFN duty-free basis.  GSP treatment 
received in 2009 was 0.4% of total exports.20   
61. Bangladesh is a beneficiary of Canada's Least Developed Country Tariff (LDCT) GSP 
programme, under which most products  from LDCs have been made eligible for duty-free entry with 
effect from 1 January 2003.  Bangladeshi exports to Canada have increased considerably since the 
introduction of flexible rules of origin criteria in  2003.  Canada imported goods worth US$0.7 billion 
from Bangladesh in 2009, 98% of wh ich were entitled to duty-free treatment.  For certain items of 
apparel and clothing, Bangladesh was the sec ond largest exporter to Canada in 2009.   
62. The rules-of-origin criteria associated with Ca nada's GSP programme are considered to be 
flexible.  Canadian GSP rules of origin stipulate minimum local value content of 40% (half of which 
can be cumulated from a GSP beneficiary country) for most products other than apparel.  Two 
possibilities for apparel exist:  (i) single transforma tion (if fabrics are sourced from among the LDCs 
or Canada), with no value-added re quirement;  (ii) minimum local va lue-added of 25% if fabrics are 
sourced from GSP beneficiary countries.   
 Japan, China, India 
63. Bangladesh, along with other LDCs, enjoys duty-free status to Japan which significantly 
expanded DFQF access to LDCs in 2007, covering 98% of its tariff lines.21  Concerning rules of 
origin in general, change in tariff classification ru le is followed.  Product-specific rules are applied for 
a number of products (e.g. minimum local-value content of 50 to 60% for electronics, vehicles and 
some agricultural products).  For articles of appa rel and clothing, single jumping rule is applied for 
apparel of woven fabric, while three-stage jumping is required for knitted appa rel.  In 2010, imports 
into Japan from Bangladesh registered a value of US$214 million, 98% of which was eligible for 
duty-free treatment.  The principal exports of Ba ngladesh enjoying duty-free treatment in Japan 
include raw hides and skins, leather and textile items.   
64. Bangladesh could benefit from China's duty -free and quota-free programme for LDC products 
which was launched on 1 July 2010.  Currently, the programme covers products of 4,788 tariff lines 
(8-digit level), accounting for 60% of all China's ta riff lines.  China has reiterated its commitment to 
further open its market to LDCs by expanding the pr ogramme's coverage to 97% of all tariff lines.  
The programme was notified to the WTO in 2011.22  While the rules of origin requirements are not 
laid out in that notification, the Bangladeshi au thorities indicated that th e rules-of-origin criteria 
associated with China's DFQF programme stipulate a value addition of 40% or a change of tariff 
heading (CTH).  At present, the LDC DFQF programme covers around 92% of Bangladesh's current exports to China.   
                                                                                                                                                                     
19 WT/COMTD/LDC/W/51. 
20 Figures supplied by Bangladesh authorities on the basis of data from USITC website. 
21 In terms of the import value, the coverage of the DFQF to LDCs is well over 99%. 
22 WT/COMTD/N/39, and WT/COMTD/N/39/Add.1/Rev.1 Bangladesh WT/TPR/S/270 
 Page 27 
 
 
65. Bangladesh is among the 48 LDCs which are e ligible to access India's unilateral Duty-free 
Tariff Preference Scheme (DFTP).  The DFTP has b een operational since August 2008, and envisages 
having 85% of its total tariff lines duty-free by 2012.  In a ddition, tariff concessions will be available 
on 9% of the tariff lines over the same timeframe, w ith a prescribed margin of preference, while the 
remaining 6% of the lines are excluded from any preferential treatment.  The DFTP scheme was 
notified to the WTO in 2011.23 
(5) FOREIGN INVESTMENT REGIME  
66. Bangladesh offers a range of investment in centives under its industrial policy and export-
oriented growth strategy, with few formal distinc tions between foreign and domestic private investors 
(Box II.1).  Bangladesh could attract greater foreign investment, which is currently around only 1% of 
GDP, if it improved the investment climate, de veloped greater power generation capacity and 
improved its infrastructure.  
(i) Institutional and legal framework 
67. The Board of Investment (BOI) and the Bangladesh Export Processing Zones Authority 
(BEPZA) are the primary investment promotion agen cies in Bangladesh.  Companies must register 
with the BOI to obtain benefits such as tax incen tives or preferential duties for imported equipment. 
The BOI also administers the approval of foreign loans and technology remittances on behalf of the 
Bangladesh Bank.  Authority for managing foreign investment remains fragmented:  the BOI can 
register investors in industrial projects outside the Export Processing Zones (EPZs) and assist them with tax inquiries, land acquisition, utility hook-ups , and incorporation.  The BEPZA performs the 
same functions for companies investing in the EPZs ;  the authorities emphasise that BEPZA provides 
"one window same day service" to its investors,  whereby operational and documentation procedures 
have been framed to make them simple to use. I nvestors in infrastructure and natural resource sectors, 
including power, mineral resources and telecommunications must seek approval from the corresponding government ministries.  Although the BOI is housed organizationally in the Prime 
Minister's Office, regulatory and administrative pow ers remain vested in the line ministries.  For 
example, foreign investment in telecommunications is regulated by the Bangladesh 
Telecommunications Regulation Act 2001 and the In ternational Long Distance Telecommunications 
Services Policy 2010.   
68. Major laws affecting foreign investment incl ude: the Foreign Private Investment (Promotion 
and Protection) Act of 1980;  the Industrial Policy Act of 2005; the Bangladesh Export Processing 
Zones Authority Act of 1980;  the Companies Act of 1994;  and the Telecommunications Act of 2001.  
The Foreign Investment Act guarantees the right of repatriation of invested capital, profits, capital 
gains, post-tax dividends, and a pproved royalties and fees.   
                                                      
23 See WTO document WT/COMTD/N/38. WT/TPR/S/270 Trade Policy Review 
Page 28 
  
Box II.1: Investment Incentives  
Main incentives offered by the government are as follows:  
Tax Holiday: 
Tax holiday facility is available for 5 or  7 years depending on the nature and locati on of the industrial enterprise.  Industri al undertaking 
eligible for tax holiday are textile, jute goods, high value ga rments, pharmaceuticals, melamine, plastic products, ceramics, s anitary ware, 
steel from iron ore, fertilizer, insecticide & pesticide, computer hardware, petro-chem icals, agriculture ma chinery, boilers, c ompressors, 
basic raw materials of drugs, chemicals, pharmaceuticals, agro-p rocessing, ship building and diam ond cutting.  Physical infrast ructure 
investment eligible for tax holiday  incl ude sea or river port, container terminals,  internal container depot, container freigh t station, LNG 
terminal and transmission line, gas pipe line, telecommunicati on other than mobile phone, large water treatment plant & supply through 
pipe line, waste treatment plant, solar en ergy plant, export processing zone.  Powe r generation company can enjoy tax holiday f or 15 years 
(up to June 2012, thereafter 5 years).  Tax holiday facilit ies are provided in accordance with the existing tax laws.  
Accelerated Depreciation: 
New industrial undertakings not enjoying tax holiday can enjoy accel erated depreciation allowance on cost of machinery in the f irst year 
of commercial production at 50%, in the second year at 30% and in the third year at 20%. 
Concessionary Duty on Imported Capital Machinery: 
Import duty, at the rate of 1% is payable on capital machinery and spares imported for initial installation of the industry or Balancing, 
Modernization, Rehabilitation and Extension (BMRE) of the existin g industries. For 100% export or iented industries, no import d uty is 
charged in case of capital machinery and sp ares.  Value Added Tax (VAT) is not payable for imported capital machinery and spare s. 
Other Incentives: 
Tax exemption on royalties, technical know-how  fees received by any foreign collaborato r, firm, company and expert.  Tax exempt ion on 
the interest on foreign loans under certain conditions.  Avoidance of double taxation in case of foreign investors on the basis  of bilateral 
agreements. 
Exemption of income tax up to 3 years for the foreign technician s employed in industries specified in the relevant schedule of income tax 
ordinance.  Facilities for full repatriation of inve sted capital, profit & dividend.  
Tax exemption on capital gains from the transfer of shares of public limited companies listed with a stock exchange. 
Special facilities and venture capital s upport is provided to expor t-oriented industries unde r "Priority Sectors" 
There is no discrimination in case of duties and taxes for the sa me type of industries set up by  foreign and local investors an d in the public 
and private sectors.   
Source : Board of Investment. 
 
69. Legislation offers incentives for investors, incl uding:  100% ownership in most sectors;  tax 
holidays;  reduced import duties on capital machinery and spares;  duty-free imports for 100% exporters of ready-made garments ;  and tax exemptions.  The Gove rnment of Bangladesh extended its 
tax holiday scheme for start-up industries through 30  June 2011.  Beneficiary industries include agro-
processing; diamond cutting, steel production, jute industries;  some textile sector units;  and 
underground railway, monorail, and telecom infrastru cture except for mobile phones.  A tax rebate 
facility to non-resident Bangladeshi investors was also extended to induce in vestment from abroad.  
Trade has gradually been liberalized, although im port duties and supplemental taxes remain high and 
constitute the largest single source of governme nt revenue.  Customs bonded warehouse facilities are 
provided to 100% export-oriented industries which can import inputs free of any duty or tax.  
Industries located in EPZs import inputs free of duty.  
70. There are few performance requirements, and these do not generally impede investment.  Free 
repatriation of profits is allowed and profits ar e almost fully convertible on the current account. 
Bangladesh Bank allows repatriation of foreign curre ncy subject to furnishing required documents as 
specified in the "Guidelines for Foreign Exchange Transactions 2009".  The Foreign Investment Act 
of 1980 bans nationalization or expr opriation without adequate compensation, and there have been no 
instances of foreign property expropriation since the Foreign Investment Act was passed.
24  Although 
                                                      
24 In the years immediately following independence in 1971, widespread nationalization resulted in 
government ownership of over 90% of fixed assets in the modern manufacturing sector, as well as all banking Bangladesh WT/TPR/S/270 
 Page 29 
 
 
discrimination against foreign investors is not  significant, some discriminatory policies and 
regulations exist.  For example, 2006 licensing regulations governing freight-forwarding agents 
impose higher bonding and capital requirements on fo reign-owned companies.  Land registration has 
historically been prone to disputes over competi ng land titles but the Government has instituted legal 
reforms to address these problems.  
71. Foreign and domestic private entities can establish and own, operate, and dispose of interests 
in most types of business enterprises.  Four sectors,  however, are reserved for government investment:  
arms and ammunition and other defe nce equipment and machinery;  forest plantation and mechanized 
extraction within the bounds of reserved forest production;  nuclear energy;  and mining.   
(ii) Bilateral investment and tax agreements 
72. The Foreign Investment Act includes a guarantee of national treatment. National treatment is 
also provided in bilateral treaties for the promoti on and protection of foreign investment.  Treaties 
have been concluded with 29 countri es, of which 26 have been ratified.  
73. A bilateral treaty between the United States and Bangladesh for the avoidance of double 
taxation was signed in 2004 and the treaty has been effective for most taxpayers since 2007.  There 
are agreements on avoidance of double taxa tion between Bangladesh and 27 countries.  
                                                                                                                                                                     
and insurance interests, except those in foreign (but no n-Pakistani) hands.  Domestically owned cotton textiles, 
jute, and sugar manufacturing units, none of which wa s owned by foreigners, we re placed under government 
control.