WORLD  TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/S/270 
10 September 2012 
 
 (12-4655) 
Trade Policy Review Body  
  
 
   
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
BANGLADESH 
 
 
  
This report, prepared for the fourth Trade Policy Review of Bangladesh, has 
been drawn up by the WTO Secretaria t on its own responsibility.  The 
Secretariat has, as required by the Agreement establishing the Trade Policy 
Review Mechanism (Annex 3 of the Ma rrakesh Agreement Establishing the 
World Trade Organization), sought clarification from Bangladesh on its trade policies and practices.  Any technical questions arising from this report may be addressed to  
Mr Mario Kakabadse (022 739 5172). 
 Document WT/TPR/G/270 contains the policy statement submitted by Bangladesh.  
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Bangladesh. Bangladesh WT/TPR/S/270 
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CONTENTS 
 
 Page 
SUMMARY   vii 
 (1) E CONOMIC DEVELOPMENTS  vii 
 (2) T RADE POLICY FRAMEWORK  viii 
 (3) T RADE POLICY DEVELOPMENTS  viii 
 (4) S ECTORAL POLICY DEVELOPMENTS  x 
 (5) O UTLOOK  xi 
I.  ECONOMIC ENVIRONMENT 1  
 (1)   INTRODUCTION  1  
 (2)   ECONOMIC DEVELOPMENTS  1  
 (3)   TRENDS IN MERCHANDISE AND SERVICES TRADE AND FDI 6  
 (4)   OUTLOOK  11  
II.  TRADE POLICY REGIME 12  
 (1)   GENERAL INSTITUTIONAL AND LEGAL FRAMEWORK  12  
 (2)   FORMULATION AND ADMINISTRATION OF TRADE POLICY  13  
 (i)   Key institutions 13  
 (ii)   Advisory and review bodies 14  
 (iii)   Main trade laws 15  
 (3)   TRADE POLICY OBJECTIVES  16  
 (i)   Vision 2021 16  
 (ii)   Import and export policy 17  
 (4)   TRADE AGREEMENTS AND ARRANGEMENTS  18  
 (i)   WTO 18  
 (ii)   Regional agreements 22  
 (iii)   Bilateral agreements 25  
 (iv)   Other preferential arrangements 25  
 (5)   FOREIGN INVESTMENT REGIME  27  
 (i)   Institutional and legal framework 27  
 (ii)   Bilateral investment and tax agreements 29  
III.  TRADE POLICIES AND PRACTICES BY MEASURE 30  
 (1)   MEASURES DIRECTLY AFFECTING IMPORTS  30  
 (i)   Customs-related measures 30  
 (ii)   Preshipment Inspection (PSI) 33  
 (iii)   Customs valuation 34  
 (iv)   Tariffs and other charges 34  
 (v)   Other charges affecting imports 40  
 (vi)   Import licensing, restrictions and prohibitions 43  
 (vii)  Contingency measures 44  
 (viii)  Government procurement 44  WT/TPR/S/270 Trade Policy Review 
Page iv 
  
    P a g e  
 (ix)   Trade-related operations of State enterp rises and state-trading (as defined in 
GATT Article XVII) 47  
 (x)   Transit measures 48  
 (2)   M
EASURES DIRECTLY AFFECTING EXPORTS  49  
 (i)   Procedures 49  
 (ii)   Export taxes, charges, and levies 49  
 (iii)   Export prohibitions, restrictions and licensing 49  
 (iv)   Export subsidies 50  
 (v)   Duty and tax concessions 51  
 (vi)   Economic zones (EZs) and export processing zones (EPZs) 52  
 
 (vii)  Export finance, insurance, and guarantees 54  
 (viii)  Export promotion and marketing assistance 54  
 (3)   MEASURES AFFECTING PRODUCTION AND TRADE  55  
 (i)   Business and investment climate 55  
 (ii)   Taxation and tax incentives 56  
 (iii)   Standards and other technical requirements 57  
 (iv)   Trade-related aspects of intellect ual property rights (TRIPS) 62  
IV.  TRADE POLICIES BY SECTOR 71  
 (1)   INTRODUCTION  71  
 (2)   AGRICULTURE  75  
 (3)   INDUSTRY SECTOR  80  
 (4)   SERVICES  83  
V.  AID FOR TRADE 96  
 (1)   OVERVIEW  96  
 (2)   TRADE AND BANGLADESH 'S NATIONAL DEVELOPMENT STRATEGY  97  
 (3)   BANGLADESH AND THE REGIONAL DEVELOPMENT CONTEXT  99  
 (4)   AID-FOR-TRADE -FINANCING  100  
 (i)   Aid for Trade and financing Bangladesh's development strategy 100  
 (ii)   Trade-Related Technical Assistance 104  
REFERENCES   107  
APPENDIX TABLES  111  
 
 
 Bangladesh WT/TPR/S/270 
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CHARTS 
 
 Page 
I.  ECONOMIC ENVIRONMENT 
 
I.1 Product composition and direction of merchandise exports, 2011/12 7 
I.2 Product composition and direction of merchandise imports 9 
III.  TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Average applied MFN tariff rates, by HS section, 2005/06 and 2011/12 38 III.2 Distribution of MFN tariff rates, 2005/06 and 2011/12 40 
V.  AID FOR TRADE 
 V.1 Aid for Trade commitments and disbursements to Bangladesh, 2002-10 102 
 
  
 
TABLES 
 
I.  ECONOMIC ENVIRONMENT 
 
I.1 Selected economic indicators, 2005/06 to 2010/11 2 
I.2 FDI inflows by sector and origin, 2005-11 10  
II.  TRADE POLICY REGIME 
 II.1 Main legislation relating to trade and trade-related activities 15 
II.2 WTO notifications during the review period 21 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Structure of trade tax revenue, 2005/06 - 2010/11 34 III.2 Tariff structure, 2005/06 and 2011/12 36 
III.3 Tariff summary, 2011/12 37 
III.4 Tariff and other duties on imports, 2005/06 and 2010/11 41 III.5 Supplementary duties by-product groups, 2009/10 and 2012/13 42 
III.6 SD rates on vehicles FY2012/13 42 
III.7 Non-financial public enterprises, 2012  47 
III.8 Lists of export-prohibited and conditional export products, 2012  50 
III.9 Cash incentives and export subsidies of selected products, 2012  51 III.10 Terms of intellectual property rights protection in Bangladesh, January 2012  63 
III.11 IP applications for trade marks, industrial designs, and patents, and patents  
 granted, 1998 and 2005-10  65  WT/TPR/S/270 Trade Policy Review 
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  Page 
IV. TRADE POLICIES BY SECTOR 
 
IV.1 GDP by sector, 2005/06 to 2010/11 71 IV.2 Industrialization and trade policy targets under Vision 2021 72 
IV.3 Export Performance of Major Products (in US$ millions) 73 
IV.4 Developments in domestic support to agriculture, 2002-07 77 IV.5 Cash incentives for selected products, 2012 79 
IV.6 Financial Soundness Indicators, 2006, 2008, 2010, 2011 86 
IV.7 Mobile Phone Subscribers in Bangladesh in 2012 89 IV.8 Chittagong Port:  Container Handling and Port Performance 93 
V. AID FOR TRADE 
 V.1 Macroeconomic indicators and targets from Perspective Plan of Bangladesh 97 
V.2 Export Performance of Major Products (in US$ millions) 98 
V.3 Doing Business Indicator Rankings for Bangladesh and other SAARC members  (ranking out of 183) 99 
V.4 Bangladesh: Selected financing for development flows 2008-10 in US$ millions 101 
V.5 Overview of national aid programmes of key donors 102 
 
 
APPENDIX TABLES 
 
 
I.  ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports by group of products 2008-12 113 
AI.2 Merchandise exports by destination, 2005-12 114 AI.3 Merchandise imports by group of products, 2005-12 115 
AI.4 Merchandise imports by origin, 2005-11 116 
AI.5 Trade in services, 2007-11 117 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
AIII.1 List of controlling importable products, 2012 118  
IV. TRADE POLICIES BY SECTOR 
 AIV.1 Recent policy measures adopted in Bangladesh 121 
 
V. AID FOR TRADE 
 
AV.1 Regional Aid for Trade Programmes 122 
AV.2 Foreign Direct Investment and Aid fo r Trade (commitments) in selected sectors 
 in US$ millions (2006-09) 123 
AV.3 Non-OECD Partners' aid programmes 124 Bangladesh WT/TPR/S/270 
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SUMMARY 
 
1. The Bangladesh economy emerged relatively unscathed from the global economic crisis 
though the country remains vulnerable because its e xports are not diversified and it depends heavily 
on migrant workers' remittances.  Although the economy has become increasingly open in recent 
years, total merchandise exports have remained li mited, averaging 18% of GDP since 2006.  Exports 
remain highly concentrated both in terms of produc ts and destinations, which carries some risk, with 
readymade-garment (RMG) exports to the EU and the U.S. the current mainstay.  However, as a 
reputable low-cost producer of garments, Bangladesh has gained global market share in recent years.  
This trend is expected to continue over the medium  term, which could partially mitigate the impact of 
slow growth in advanced economies.  
(1) ECONOMIC DEVELOPMENTS  
2. The average annual real GDP growth of the Bangladesh economy during the last six years 
was over 6%,  aided by conducive macroeconomic policies, strong export growth and favourable 
weather.  GDP growth was broad based with agricu lture, industry and service sectors performing well.  
According to preliminary estimates, GDP growth in FY20121, although still estimated  to be over 6%, 
has slowed slightly. The performance of exports, a key growth driver, has d eclined as the year has 
progressed, largely due to weaknesses in Bangladesh's key market, the EU.   
3. The overall balance of payments remained in surplus during most of the review period, 
enabling the country to continue accumulating intern ational reserves.  However, this turned into 
deficit in FY2011, for the first time in a decade, beca use of the combined impact of rising imports of 
food, fuel and capital goods, and weak growth of wo rkers' remittances and aid inflows.  Even though 
its exports have increased significantly, Bangladesh still suffers from a chronically weak foreign trade 
account because of its dependence on imports of most essential goods, including fuel.  A further 
slowdown in the global economy may worsen the ba lance of payments by negatively affecting 
exports, remittances and FDI inflows.   Substantial inflows of remittances are crucial to Bangladesh's 
macroeconomic stability, as they offset to a large extent the trade, services and income deficits.  
4. Bangladesh has outlined a vision of becoming a middle-income country by 2021. This would 
require it to grow by at least  8% per year, comp ared to the current 6%-7%,   driven by accelerated 
growth in the industrial and services sectors, dive rsification of export markets and higher foreign 
exchange earnings from the export of semi-skilled and skilled labour.    Bangladesh needs to improve 
the investment climate and continue to carry out  trade-related reforms to increase domestic and 
foreign investment for more rapid and inclusive trade-enhancing growth. The Government needs to 
focus its trade reform efforts on reducing trad e distortions, minimizing anti-export bias through 
further tariff reforms and ensuring greater integra tion into the multilateral trading system.  Low tax 
collections remain a major constraint since they affect the Government's capacity to increase public 
investment in energy and other infrastructure sectors.  
5. Bangladesh remains  vulnerable  to climate ch ange and natural calamities such as cyclones 
and floods, causing substantial economic losses, reduced economic growth and halting progress in 
poverty reduction.  Nevertheless Bangladesh has made impressive economic and social progress in 
the past decade despite frequent natural disasters.   Poverty declined from 57% of the population in 
1990 to an estimated 31.5% in 2010, ensuring that Bangladesh is on track to meet the Millennium 
Development Goal of halving extreme poverty by 2015.   According to OECD data, between 2002 
                                                      
1 Covers the period 1 July 2011 to 30 June 2012 WT/TPR/S/270 Trade Policy Review 
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and 2009, Bangladesh was the second largest recipient of aid for trade among LDCs with the focus on 
meeting broad infrastructure needs, enhancing comp etitiveness and institutional capacity building.    
(2) TRADE POLICY FRAMEWORK  
6. Bangladesh, an original Member of the WTO, gran ts at least MFN treatment to all its trading 
partners and receives the special and differential tr eatment provided for in the WTO Agreements.  It 
continued to participate actively in the work of th e WTO, serving twice as the coordinator of the LDC 
Group in Geneva in 2007 and 2011, and advocatin g issues of interest to LDCs, including greater 
market access, increased flexibilit y in the development of multilateral trade rules as well as targeted 
assistance to trade infrastructure.    
7. The principal responsibility for making trade policy is shared between the Ministry of 
Commerce and the Ministry of Finance, although a la rge number of other ministries and agencies are 
involved in the formulation and impl ementation of trade and investment  policies.  The Government is 
looking at ways to better coordinate policy on trad e and investment-related matters between ministries 
and departments, and between them and the privat e sector within the framework of developing a 
comprehensive trade policy for the next five years.   
8. Reforms of the legal and regul atory framework have become essential in certain areas for 
facilitating economic growth and soci al development. Since the previous Review, in addition to the 
regular import and export policy guidelines, important  new legislation has been passed in trade-
related areas including: standards and accreditati on, SPS, government procurement, intellectual 
property rights, economic zones, money laundering , insurance, tourism, telecommunications and 
competition.  
9. Bangladesh's involvement in and commitment to regional integration initiatives has deepened 
during the review period with the progressive development of a South Asian Free Trade Area (SAFTA) and a Bangladesh, India, Myanmar, Sri Lanka and Thaila nd Economic Cooperation 
(BIMST-EC) Free Trade Area as well as the expansi on of product coverage under the Asia Pacific 
Trade Agreement (APTA), also known as the Bangkok Agreement. Exports to SAFTA and 
BIMSTEC partner countries have remained limited, accounting for only 3% of total exports in each 
case.  Bangladesh, a beneficiary under various GSP schemes and an active participant in the Global 
System of Trade Preferences among Developing Co untries (GSTP), is pursuing efforts to obtain duty-
free access to the United States market for its tex tiles and clothing, although exports to the U.S. under 
preferences remain insignificant. 
(3) T
RADE POLICY DEVELOPMENTS  
10.  The customs tariff is Bangladesh's ma in trade policy instrument as well as a 
significant although declining source of government re venue  (on average 18.1% of total tax revenue 
during the review period).  Almost all tariff rates are ad valorem , thus ensuring a high degree of 
transparency.  The duties on basic raw materials, ca pital machinery and parts, intermediate goods and 
finished products are 5%, 3%, 12% and 25% resp ectively; the zero per cent rate on commodities like 
rice, wheat, onions, pulses, edible oils, seeds, fertilizers, medicines and cotton has been kept 
unchanged.   The average applied MFN tariff (exclu sive of specific duties and other charges) fell 
slightly from 15.5% in 2005/06 to 14.9% in 2011/12.  The average customs duty on agricultural products (19.4%)   remains higher than for industrial goods (14.3%).  There is a concentration of tariff 
lines at the three higher customs duty rates, and a pronounced escalation in several areas (including 
textiles and leather), seemingly in line with national policy priorities. Bangladesh WT/TPR/S/270 
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11. Bangladesh has bound 17.8% of all tariff lines.  For agricultural tariff lines, 100% of are 
bound;  this is the case for only 2.7% of industrial ta riff lines.   The non-agricultural bound lines are at 
several rates ranging from zero to 200%, with a marked concentration at 20'%, 30% and 40%. As a consequence, market-access conditions for manufactur ed items are subject to some uncertainty;  the 
absence of bindings for most tariff lines and the current gap of 157 percentage points between the 
average bound and applied MFN tariff rates provides considerable scope for the authorities to raise 
applied rates.    
12. Additional protection has been maintained throug h other charges and internal taxes, notably 
regulatory duties and supplementary duties (SDs).  SDs,  which apply to nearly 20% of  tariff lines, are 
aimed at discouraging the import of luxury goods and the supply of goods or services considered 
undesirable on social, moral, religious or health  grounds. Maximum protection rates with SDs of 
250% or more apply to alcoholic beverages, ciga rettes and luxury cars.  While SDs are like excise 
taxes and are, in principle, trade neutral (i.e. the same rates apply to imports and similar domestically 
produced goods), this may not always be the case in practice.  SDs constitute a tool for levying 
additional tariffs on any imported goods, as and when deemed appropriate by the authorities, with 
essential and non-luxury goods, including raw materi als and intermediates, also subject to 
supplementary duty.   Levied on the landed value of goods plus customs duty, but excluding VAT, 
supplementary duties have a cascading effect as prot ection rates rise further with higher customs duty 
rates.   
13. Significant customs modernization is under way to facilitate speedy customs clearance 
through automation and to improve transparency in  the customs clearance process. Import clearance 
and export procedures have been further simplified by reducing the number of signatures needed for 
clearance of consignments and the frequency of inspection of goods. The port of Chittagong, which 
handles over 90% of the country's  import/export tr ade, has significantly improved its competitiveness 
and efficiency relative to other ports in the regi on in terms of costs, vessel turn-around time and 
container handling productivity.  Preshipment insp ection (PSI) has begun to be phased out to allow 
customs officials to gradually assume greater resp onsibility before the PSI system is due to be 
removed completely at the end of 2012 after the expiry of existing contracts with the PSI agencies.  
14. Regarding import restrictions, Bangladesh has ma intained the limited product coverage of the 
control list containing import prohibitions and restri ctions in force. No contingency measures have 
been taken during the period under review.   
15. Currently, it is estimated that annual expe nditure on procurement of goods, works and 
services in the public sector of Bangladesh acc ounts for 20%-24% of the annual national budget. The 
2008 Public Procurement Act and Public Procur ement Rules contain most features of good 
international public procurement pract ices and the new framework establishes inter alia  a domestic 
preference of 15% of the delivered price for goods and 7.5% of the contract price for works.    A new 
legal framework for competition is now in place.  Widespread state involvement in the economy 
persists with state-owned enterprises largely engaged in commercial activities and exercising a 
dominant influence in many  key industries incl uding jute, textiles, steel, chemical/fertilizer 
production, sugar, utilities and transport.  
16. Export prohibitions are maintained mainly for r easons of health, ecological balance, security, 
archaeological value, or maintenance of adequate do mestic supply.  Export permits/authorizations are 
required for a few items.  Exports of urea fertilizer (produced at the state-owned  KAFCO  plant) 
remain restricted.  A ssistance for domestic production and exports (export-oriented firms, "deemed 
exporters", and firms operating in export processing zones) varies by type of activity to, inter alia, 
encourage use of domestic technology, import substitution, adjustment and/or boost export WT/TPR/S/270 Trade Policy Review 
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performance, as well as to offset the adverse effects of tariffs and other border taxes.  Such assistance 
is available in the form of tax and non-tax incentives.   The former include:  indirect tax measures such 
as concessionary duty rates on imports of capital machinery and spare parts, duty drawback for 
exports, special bonded warehouses for inputs used in  the manufacture of finished products, and VAT 
rebates on certain export-related services; and dir ect tax measures, like rebates on taxable income 
generated from any export business or exemption from income tax.   
17. Other forms of support consist of cash gran ts for exports, accelerated depreciation, and 
various types of loans at concessional interest ra tes (for exports, agricultural production, small and 
cottage industries) determined by the Bangladesh Bank.   
18. While economic processing zones have had some success in attracting investment and in 
contributing to exports, their impact remains limited  in the amount and type of exports, investments, 
and employment. The Bangladesh Economic Zone  Act 2010 will facilitate establishing up to 20 
economic zones, which are expected to generate 1.5 million new jobs when in operation, and around 
85% of the country's exports by 2021.  
19. Bangladesh is upgrading its quality and standards infrastructure towards international levels 
by collaborative efforts with the newly operati onal Bangladesh Accreditation Board, established 
under the Bangladesh Accreditation Act (2006). SPS matters are handled by the Ministries of 
Agriculture, Health and Fisheries and Livestock within a regulatory framework of numerous legal 
instruments. Bangladesh has faced, and overcome, cr itical challenges in meeting export standards, in 
particular to the EU market which is the la rgest importer of Bangladesh frozen shrimps.  
20. Bangladesh continues to bring its IP laws in line with the TRIPs Agreement and other 
international commitments within national economic a nd social development strategies. As an LDC,  
Bangladesh has been given an extended time limit until July 2013 for the full implementation of the 
provisions of the TRIPS Agreement, other than tho se relating to national treatment and most-favoured 
nation treatment.  Bangladesh is also a benefici ary of the TRIPS Council decision extending until 
2016 the transition period during which LDCs do not  have to protect or enforce patents and 
undisclosed information relating to pharmaceuticals.  Bangladesh recognizes that enforcement of IPRs 
is important for encouraging innova tion and creation although it admits that enforcement falls short of 
the desired level.  
(4) SECTORAL POLICY DEVELOPMENTS  
21. Raising productivity in the labour-intensive agriculture sector  continues to be a concern in 
Bangladesh, which is prone to natural disasters.   Rice production is the most important economic 
activity in rural Bangladesh, with rice constituting 90% of total food grains produced annually. Tariff 
and non-tariff protection has been reduced.  To  cut production costs and face competition from 
neighbouring countries, support to domestic production has been strengthened through the 
subsidization of agricultural inputs (i.e. seeds, fertilizer, irrigation, capital, through concessional 
interest rates, and electricity) and public proc urement practices.  Trade policy with respect to 
importable food staples (rice and wheat) is character ized by interventions based on food security 
concerns and variable in terms of levels of pr otection and support.  Bangl adesh has maintained a 
direct cash subsidy of up to 20% for certain agricu ltural and fisheries exports (i.e. frozen shrimp and 
fish, fruits, vegetables, agro-processed products) during the review period.   
22. Manufacturing remains dependent on the labour-i ntensive readymade-garment (RMG) sector 
and large loss-making SOEs. It was feared that  the phasing-out of quot as in accordance with the 
Agreement on Textiles and Clothing (ATC) in 2005 w ould adversely affect Bangladesh, but by then Bangladesh WT/TPR/S/270 
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the country had achieved sufficient competitiveness to  survive and the garment sector has continued 
to achieve sufficient growth. The garment industry is  expected to remain the largest contributor to 
growth in output for the foreseeable future, in pa rticular since the 2011 change in EU import rules 
which gives Bangladesh and other LDCs duty-free access if imported components of the final product 
do not exceed 70% (compared to 30% previously ). Government support measures include the 
provision of bonded warehouse facilities, technologi cal upgrading (concessionary duty rates and tax 
exemptions for the import of capital machinery), cash  subsidies for the use of local fabrics as inputs 
for exporting RMG enterprises and an export credit guarantee scheme covering risks on export credits 
at home, and commercial and political risks abroad.      
23. Services represent half of Bangladesh's GDP and ar e expected to maintain their rapid  growth 
in the coming years as the Government continues to  focus on developing services trade, in particular 
the country's outsourcing capabilities, including call centr es.  In the context of privatization across all 
industries, which has intensified since the 1990s, liber alization measures have been taken especially in 
financial services, telecommunications and transpor t services.  The mobile telecommunications sector 
has been opened up to competition with the participa tion of both domestic private and foreign capital.  
The entry into the market of private operator s since 1998 has led to mobile-phone subscriptions 
increasing from a negligible number to nearly 90 m illion by early 2012.  Measures have also been 
taken to allow for private participation in shi pping and port services with a view to increasing 
efficiency and competitiveness in logistics servi ces.  While small and re latively underdeveloped, 
contributing less than 2% of GDP, the bank-dominated  finance sector in Bangladesh is characterised 
by diversity and a continuing, although d eclining, state involvement in the sector.  
24. The experience of Bangladesh shows that forei gn market access for services provided through 
the temporary movement of workers and professionals  can have significant positive effects in terms of 
improved availability of scarce foreign currency, im proving the current account balance, financing of 
higher levels of imports, economic  growth, employment generation and poverty reduction.  The value 
of remittances to the Bangladesh economy is many ti mes larger than aid or FDI.  Remittances more 
than doubled during the review period, reaching US$12.8 billion in FY2012.   
25. Bangladesh has not changed its GATS commitm ents since its previous Review.  The 
activities of five star hotel and lodging services, and telecommunications services are the only commitments covered by its schedule.  Bangladesh  is active in the Doha Round services negotiations, 
especially on LDC-related matters, such as the LDC collective request on mode 4 and the LDC 
waiver.    
(5) O
UTLOOK  
26. Bangladesh has enjoyed robust growth during th e review period and, given its inherent 
strengths - especially a vibrant private sector and a large pool of inexpensive labour - the prospects for continuation of such growth are relatively good.  Unit labour costs in the dominant garment industry 
are well below those of the nearest competitors.  Fo reign investors are showing interest in large-scale 
relocation of labour-intensive industries, particularly  garments and related te xtile manufacturing.  In 
addition, sectors such as shipbuilding, pharmaceutic als, ceramics, and processed and frozen foods 
have shown dynamism in recent years. 
27. Although the outlook appears optimistic, both RM G exports and remittances are vulnerable to 
shocks:  external demand with garments, domestic labour unrest, and changes in market access;  and 
remittances from changes in labour regulations and policies, or shocks in Kuwait or Saudi Arabia, 
which absorb over half the migrant Bangladeshi population.  A deterioration in the outlook for both could cause significant external pressure, particular ly as FDI flows remain low by most measures, WT/TPR/S/270 Trade Policy Review 
Page xii 
  
constrained by the trade regime, poor infrastruct ure, governance problems and a difficult business 
climate.  Longer-term growth prospects hinge on generating sufficient resources to relieve infrastructure bottlenecks and ensuring a comp etitive business environment focused on labour-
intensive activities.