WORLD TRADE  
ORGANIZATION  WT/TPR/M/168 
7 November 2006 
 (06-5354) 
Trade Policy Review Body 
13 and 15 September 2006  
 
 
 
TRADE POLICY REVIEW 
 
BANGLADESH 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mrs. Claudia Uribe (Colombia) 
 
   Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF BANGLADESH 4 III. STATEMENT BY THE DISCUSSANT 6 IV. STATEMENTS BY MEMBERS 8 
V. REPLIES BY THE REPRESENTATIVE OF BANGLADESH AND ADDITIONAL 
COMMENTS 16 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 30 
 
 
Note:   Advance written questions by WTO Members and the replies provided by Bangladesh are 
reproduced in document WT/TPR/M/168/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. 
   
   WT/TPR/M/168 
 Page 3 
 
 
 
 I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Bangladesh was held on 13 and 15 September 2006.  The 
Chairperson (H.E. Mrs. Claudia Uribe (Colombia) welcomed the delegation of Bangladesh, headed by 
Commerce Secretary, Mr. Feroz Ahmed, and the discussant Ambassador Don Stephenson (Canada).  As usual, the discussant would speak in his pe rsonal capacity and not as a representative of his 
country.  In accordance with the established pro cedures, the discussant had made available, in 
advance, outlines of the main issues he intended to raise (document WT/TPR/D/144). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Bangladesh was contained in document 
WT/TPR/G/168 and that of the WTO Secretariat in WT/TPR/S/168.  As indicated in 
WT/TPR/6/Rev.1, the Member under review should pr ovide written answers, by the beginning of the 
review meeting, to questions submitted at least two weeks before the meeting.  Questions posed 
subsequently should be answered, to the extent possi ble, before the start of the second session of the 
meeting.  Questions left unanswered at the end of the second session should be answered in writing no 
later than one month after the meeting.  Questions by the following delegati ons had been submitted in 
writing at least two weeks in advance of the mee ting and had been transmitted to the delegation of 
Bangladesh:  Israel;  Korea;  Colombia;  the United States;  Japan;  Hong Kong, China;  the European 
Communities;  and Canada.  Copies of these questions  and of the answers provided by the delegation 
of Bangladesh were available in the meeting r oom.  Switzerland, Turkey, Australia, Brazil, and 
Singapore had submitted written questi ons after the two-week deadline.  These questions had also 
been transmitted to the delegation of Bangladesh ;  copies of these questions and of the answers 
provided by the delegation of Bangladesh were availa ble in the meeting room.  Copies of all advance 
questions, as well as the responses received from th e delegation of Bangladesh, are reproduced in 
WT/TPR/M/168/Add.1. 
3. The Chairperson noted, from the two reports, that  since the previous Trade Policy Review of 
Bangladesh its cautious macroeconomic policies had ensured steady economic growth with modest 
inflation.  Its liberal investment regime had a ttracted increasingly large annual inflows of foreign 
direct investment.  Rising per capita income, state action, and civic activism had allowed for considerable improvement of social indicators,  although aggregate poverty rates remained high.  
Bangladesh remained heavily dependent on exports of  clothing, and significant state involvement in 
the economy persisted.  To, inter alia,  raise export competitiveness, Bangladesh had further reduced 
major barriers to trade, including the tariff, an d other import as well as export restrictions.  
Bangladesh's commitment to regional integration in itiatives was being deepen ed.  The Chairperson 
considered that Members were likel y to welcome further details on, inter alia,  developments in tariff 
and other border charges, the adjustment of the dominant ready-made garments industry to the 
elimination of quotas in accordance with the Ag reement on Textiles and Clothing (ATC), the 
development of the labour-intensive agricultu ral sector, and the pace of progress in improving 
governance, tax administration, and privatizati on.  She hoped that the discussion would help 
Bangladesh's policy makers in their challenging work  and at the same time allow WTO Members to 
acquire a better understanding of its needs and cha llenges in several trade and trade-related areas. WT/TPR/M/168 
Page 4  
 
  II. OPENING STATEMENT BY THE REPR ESENTATIVE OF BANGLADESH 
4. The representative of Bangladesh
 stated that since the previous Trade Policy Review in 2000, 
GDP growth had remained steady and fairly robust,  despite challenges such as devastating floods, the 
sharp rise in international prices of essential co mmodities, and the abolition of ATC/MFA-related 
quotas.  Private-sector investment had increased gradually.  The budget-deficit as a percentage of 
GDP had declined.  Total trade had registered double- digit growth, thus contributing to the increase in 
the trade-GDP ratio and reflecting the enhanced  importance of foreign trade in the economy. 
5. Bangladesh had continued to liberalize its import regime through the rationalization and 
reductions of tariffs as well as the dismantlement of import restrictions in accordance with the phase-out plan submitted to the WTO in 2000.  Various steps had also been taken to streamline customs 
clearance procedures and implement the WTO Agreement on Customs Valuation.  Pre-shipment 
Inspection (PSI) requirements had been introduced w ith a view to accelerating customs clearance and 
reducing costs.  Customs clearance procedures ha d been modernized with the introduction of a 
Simplified Administration Document and a Direct Traders’ Input under the Automated System for 
Customs Data  (ASYCUDA). 
6. Bangladesh attached great importance to th e market access opportunities offered under the 
multilateral trading system.  To overcome export de pendence on textiles and clothing, his government 
had been giving utmost priority to diversifying its  export base.  Various facilities were being provided 
to the producers and exporters of new and non-trad itional products, including assistance for market 
exploration, product development and securing join t-venture investment;  these facilities included the 
establishment of an Export Promotion F und and five new export processing zones. 
7. To increase competitiveness and diversify expor t products (and markets), Bangladesh had 
enhanced its participation in regional and preferen tial trading arrangements.  Economic cooperation in 
the South Asian Association for Regional Co operation (SAARC) region had been further 
strengthened through transforming the SAARC Pref erential Trading Arrangement to a South Asian 
Free Trade Area (SAFTA) (in force as from 1 Janua ry 2006) as well as the signing of the Framework 
Agreement on Bangladesh–India–Myanmar–Sri La nka–Thailand Economic Cooperation (BIMSTEC) 
Free Trade Area, which would enter into force s oon;  the BIMSTEC covered trade in goods, services, 
and investment.  The Bangkok Agreement (rename d as Asia Pacific Trade Agreement (APTA)) had 
been revitalized with the accession of China, and its product coverage  had been further extended.  
Bangladesh had also signed the Preferential Tr ade Agreement (known as D-8) along with the 
eight developing Muslim countries. 
8. In the area of fiscal policy and management, th e Bangladesh government attached priority to 
enhancing the effectiveness of public expenditu re by channelling resources appropriately and 
mobilizing larger amounts of revenue.  Bangladesh had taken bold initiatives towards modernizing the 
customs, value added tax, and tax administration w ith a view to preventing leakage of all kinds of 
revenue, and enhancing th e quality of service and professional skills.  A Central Intelligence Cell and 
a Large Taxpayers' Unit had been established.  Audit firms had been appointed to prevent tax evasion.  
The rates of non-tax revenue had been enhanced to augment domestic resource mobilization; the 
income tax and VAT net had been expanded.  In 2005, the Parliament had enacted the Tax 
Ombudsman Act and the Government had established the Office of the Tax Ombudsman to deal with 
deficiencies, corruption, and disputes in the tax system.  A Public Expenditure Management Manual 
and an Internal Control Manual had been prepared ;  a separate Resource and Debt Management Wing 
had been established in the Ministry of Finance.   A new regulatory and institutional framework for 
government procurement had been introduced, and a Central Procurement Technical Unit (CPTU) had 
been established for policy formulation, monitoring, and improving government procurement procedures.  WT/TPR/M/168 
 Page 5 
 
 
 
 9. As from 31 May 2003 Bangladesh had replaced its fl exible exchange rate with a market based 
floating exchange rate system.  It had further libera lized the release of foreig n exchange for education 
and travel purposes, and removed the mandatory ma rgin requirement for opening a letter of credit 
(L/C).  Moreover, the requirement of prior a pproval from the Bangladesh Bank for making advance 
payment had been relaxed to a great extent. 
10. Privatization was a key element in the private-sector-led growth strategy.  From 1993 to 
January 2006, the Privatization Commission had pr ivatized 65 state-owned enterprises (SOEs) 
through international tender or off-loading of shares.  The privatization of seven more SOEs, 
including a large commercial bank, was planned, a nd the import activities of the Trading Corporation 
of Bangladesh had been curtailed drastically.  The tariffs on electricity and gas had been gradually 
rationalized to reflect the cost of supply and the Government had lifted restrictions on private 
(domestic, foreign) investment in pow er generation and distribution.   
11. Bangladesh had established a credible record of  sustained growth within a stable market-
oriented macroeconomic framework.  Progress had b een achieved in controlling the rate of population 
growth, increasing average life expectancy, incr easing significantly women’s participation in 
economic activities, and raising s ubstantially the net primary school enrolment, including the number 
of female students in primary and secondary school s.  The micro-credit programme had contributed 
significantly towards reduction of poverty.  All th ese successes, which  had been achieved through the 
coordinated efforts of public and private sect ors as well as non-government organizations, had 
allowed Bangladesh to graduate from low to medium  category in the UN human development index.  
12. The contribution of the clothing sector in term s of employment and GDP substantiated that 
trade could play an important role in Bangladesh's  socio-economic development.  Bangladesh deeply 
appreciated the enhanced market access provided by many developed countries, and hoped that the 
developing Members of the WTO that declared th emselves so able would accord duty-free and quota-
free market access for all products originating from least-developed countries, with simplified rules of 
origin, immediately and without staging.  In additio n, appropriate mechanism needed to be devised to 
address the erosion of preferences resulting from the lowering of MFN tariffs. 
13. Food security was always a matter of concern fo r Bangladesh;  it needed to be addressed with 
appropriate measures.  To meet  national emergencies and devel opment objectives, food aid should 
continue. 
14. Bangladesh needed technical assistance and capacity building to address its supply-side 
constraints and also to meet sanitary and phyto sanitary measures and Technical Barriers to Trade 
requirements.  In order to reduce the cost of  doing business and raise export competitiveness, its 
infrastructure needed to be developed and upgrad ed.  He hoped that the Aid for Trade programme 
would be implemented in a meaningful manner. 
15. By extending trade-related f acilities and cooperation to Banglad esh, many countries had been 
supportive of its efforts to improve the quality of life of Bangladeshi people.  He hoped that this 
would continue, to facilitate Bangladesh's integr ation into the MTS for their mutual benefit. WT/TPR/M/168 
Page 6  
 
  III. STATEMENT BY THE DISCUSSANT 
16. The discussant
 (H.E. Mr. Don Stephenson) was pleased to discuss the trade policies of a 
Member for whom integration in international tr ade represented the best hope for growth, poverty 
alleviation, and improving governance.  Bangladesh,  the largest LDC Member of the WTO, believed 
that the MTS would play a significant role in ec onomic development, and thereby improve the living 
standards of its people. 
17. Macroeconomic policies had been cautious and reasonably effective, designed to ensure 
steady demand-driven economic growth with modest inflation.  The recent slowdown in growth and 
inflationary pressures were largely due to meteorological misfortune and global price surges that were having an impact on all WTO Members.  Monetary  policy had been broadly supportive of growth 
while ensuring price stability and orderly foreign ex change market conditions.  Since May 2003, the 
exchange rate had been managed fl exibly as a means of maintaining external competitiveness and as a 
first line of defence against external shocks 
18. Macroeconomic stabilization and struct ural reform had been pursued to, inter alia,  assist 
Bangladesh’s orderly adjustment to the phasing-out of the quotas associated with the ATC.  He was 
interested in learning more about the extent of th is structural reform during the period under review 
and future plans in this area.  In light of Bangl adesh's dependence on exports of clothing, he hoped to 
receive explanations on prospect s for export diversification. 
19. Bangladesh’s confidence in, and commitment to, the MTS were reflected by several positive 
trends and developments.  Bangl adesh had registered current account surpluses and had attracted 
increasingly large annual inflows of FDI, mainly into textiles manufacturing as well as in 
telecommunications, energy, and power. 
20. He commended Bangladesh's steps to better c oordinate policy on trade and related matters 
through a WTO Cell in the Ministry of Commerce,  a National Advisory Committee, and a Foreign 
Trade Institute.  The Government report stated that  steps were being taken to promote consistency 
between import policy and industrial policy.  Such efforts needed to be maintained and strengthened 
in order to address a number of key challenges, in cluding the fact that the current account had turned 
to a deficit in 2004/05. 
21. As tax revenue (10.9% of GDP) appeared to be insufficient to meet Bangladesh’s 
developmental needs, he hoped that reforms to impr ove tax collection would continue.  The dearth of 
tax revenue contributed to Bangladesh’s ongoing de pendence on tariffs and border levies as a source 
of revenue.  The application of such duties to cer tain raw materials and in termediate products could 
ultimately undermine and stunt the benefits of trad e driven growth.  Furthermore, their complexity 
might prove susceptible to corrupt practices as sugg ested by Bangladesh's ranking by Transparency 
International.  The 2004 Anti-Corruption Commi ssion Act, the 2005 Tax Ombudsman Bill and the 
2002 Money Laundering Prevention Ac t were legislative remedies whose effectiveness would be 
judged more fully in the longer term. 
22. In light of Bangladesh's role in the dialogue  on enhancing the Integrated Framework on Trade 
Related Technical Assistance (TRTA) and the Aid for Trade initiative, he asked the authorities to 
elaborate on their TRTA experience during the period  under review, as well as on any urgent needs in 
this area. 
23. One of the primary engines of economic growth  and wealth-creation was the expansion of 
exports and the internal opening of markets, helped along by a gradual lowering of the customs tariffs.  
He commended Bangladesh for reducing the produc t coverage of import r estrictions and bans.  WT/TPR/M/168 
 Page 7 
 
 
 
 24. The customs tariff was Bangladesh's main trad e policy instrument and a major source of 
government revenue (26.4% of total tax re venue).  Almost all tariff rates were ad valorem , thus 
ensuring a high degree of transparency of the custom s tariff.  The absence of bindings for most tariff 
lines and the gap of 149 percentage points betw een the average bound and applied MFN tariff rates 
provided a great deal of scope for the authorities to  raise applied rates.  Additional protection had 
been maintained through other border charges (infra structure development surcharge, advance income 
tax) and discriminatory internal taxes (VAT, s upplementary duty, regulatory duty); other border 
charges were at a minimum rate of 4%, which was hi gher than the bound rate of 2.5% for this type of 
levy. 
25. He noted that the complexity of the impor t-export regime risked undermining Bangladeshi 
exports and to a certain extent nullifying the bene fits of growing market access opportunities.  While 
certain assistance for expo rts (several tax and non-tax incentives) was intended to offset the adverse 
effects of tariffs and other border levies, he was not  convinced that an array of measures (including 
concessional tariffs and the duty drawback system) c ould effectively mitigate the adverse impact of 
border protection.  Other trade policy issues, such as local-content requirements, fiscal incentives, and 
cash export subsidies, were already covered by many of the questions submitted in advance by 
Members. 
26. Bangladesh's involvement in regional integra tion initiatives was being deepened with the 
progressive establishment of SAFTA and a BIMSTE C, as well as the expansion of the product 
coverage under the APTA.  Bangladesh was also a be neficiary under various Generalized System of 
Preferences schemes and an active participant in the Global System of Trade Preferences among 
Developing Countries.  Its active participation and l eadership in the Doha Round had been effective in 
advancing the Duty Free-Quota Free issue.   
27. As Bangladesh was effectively expanding mark et access opportunities at the multilateral and 
regional level, there would be a tremendous incentiv e to ensure that domestic  policies were calibrated 
to capitalize on such access.  A number of key sectoral policies were particularly relevant in this 
regard and a recurring theme across many of them (t extiles, jute, chemicals/fertilizers, sugar, utilities) 
was the dominant influence of large loss-making SO Es in the manufacturing sector.  The elimination 
of quotas in accordance with the ATC did not see m to have had immediate negative effects on 
ready-made garments (RMGs) exports, but risks rema ined.  He was interested in hearing more about 
the prospects for the RMGs sector and the extent of  post-ATC structural adjustment.  In light of the 
fourfold increase of exports of pharmaceuticals sinc e 2001, and the rise of the share of domestically 
produced medicines, he sought information on the types of measure used to obtain these results. 
28. Despite an upsurge in cereal production, Ba ngladesh remained a food aid recipient.  
Self-sufficiency and food security were major polic y objectives.  In this context, the 2003 introduction 
of a direct cash subsidy of up to 30% for certain  agricultural and fisheries exports was somewhat 
counter-intuitive and was perhaps a subject to  be considered for improving domestic policy 
coordination. 
29. As services accounted for more than half of Bangladesh's GDP and constituted a major 
element of the production and trade process, he que ried the extent to which Bangladesh might be 
embracing mode 1 and 2 business models (i.e. the cross-border provision of services), which seemed to offer formidable prospects for development.  Natio nal flag vessels continued to be subject to local 
participation/ownership requirement s, and part of overseas-bound cargo was reserved for them;  this 
was another domestic policy measure that might  create a bottleneck and be detrimental to 
opportunities. WT/TPR/M/168 
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  IV. STATEMENTS BY MEMBERS 
30. Members welcomed the delegation of Banglad esh and thanked the Government and the 
Secretariat for their reports.  They looked forward to receiving any outstanding replies to their advance written questions.  They also thanked the discussant for his useful comments.  Members 
commended Bangladesh's macroeconomic performance and trade liberalizing reforms, which had 
contributed to an improvement in certain social indicators, poverty reduction, and an increase in per 
capita GDP.  They also noted that annual FDI in flows had risen during the period under review.  
Members commended Bangladesh's leading role among LDCs  in promoting an open and rules-based 
system as well as its active participation in  the Doha Developmen t Agenda negotiations. 
31. The representative of the Republic of Korea
 stated that the achievements in economic growth 
and FDI inflow resulted from Bangl adesh's intensive efforts to stre ngthen and simplify the legal and 
institutional framework in areas such  as tax, privatization, and structural reforms.  Bangladesh, 
however, was facing economic challenges caused by floods, rising global oil prices, and an unstable 
business environment, as well as costly use of hartals , a means of political protest.  In light of recent 
property damage to foreign investment firms in  the Dhaka Export Processing Zone,  Bangladesh 
should intensify its efforts to promote a more  FDI-friendly environment and greater economic 
stability.  Korea was one of the largest investors in  the country and looked forward to furthering its 
productive and substantial relationship with Ba ngladesh.  Korea welcomed Bangladesh’s recent 
commitment to regional integration initiatives for trade facilitation.   
32. The representative of Colombia  highlighted aspects of his country's bilateral trade deficit with 
Bangladesh.  He commended Bangladesh's fearless at titude in opening its market and using free trade 
as a tool for improving the living standards of its people.  Tariff and non-tariff barriers had been 
reduced during the period under review.  The few ex isting standards were substantially adjusted to 
international norms.  Intellectual property rights le gislation was being put into conformity with the 
provisions of the WTO TRIPS Agreement, and a consumer protection law was being finalized. 
33. Bangladesh could accelerate the attainment of its poverty reduction objectives by revising its 
policy on WTO tariff bindings and services commitm ents.  A policy change in this area would 
improve the competitiveness of the domestic industry, help to achieve better conditions of trade with 
trading partners and promote private investment.  Transparency being an important component of the 
MTS, he encouraged Bangladesh to notify the variou s incentives to production and trade that were in 
place.  In light of the existing infrastructure bottlen ecks, he suggested that foreign investment could 
contribute for improving infrastructure.  
34. The representative of the United States  highlighted aspects of the expanding trade 
(particularly textiles and apparel) and investme nt relationship as well as port security cooperation 
between his country and Bangladesh.  His delegati on supported Bangladesh’s e fforts to improve its 
trade regime by tackling tariff and non-tariff barrier s to imports, finding ways to diversify its export 
base, and seeking to improve the climate for foreign investment.  The industrial and services sectors 
were making increasingly greater contributions to Bangladesh’s economic growth and export 
diversity.  Growth in the services sectors was a positive force in improving the livelihoods of the 
Bangladeshi citizens; therefore, his delegation enco uraged Bangladesh to co nsider the investment-
related benefits of making furthe r commitments under the GATS in the critical areas of financial 
services, information technology and communica tions (ITC), energy, power generation, and 
transportation.   
35. The United States was concerned about the significant macroeconomic risks facing 
Bangladesh and was ready to assist in addressing critical development and investment confidence 
issues including:  fiscal imbalances, long-standing weaknesses in infrastruct ure;  and governance 
matters.  His delegation was particularly interested in learning more on the status of recent efforts by  WT/TPR/M/168 
 Page 9 
 
 
 
 Bangladesh to accede to certain international treat ies, and to improve do mestic law and enhance 
enforcement for the protection of IPRs, an area wh ere the United States was ready to offer assistance 
to implement the TRIPS Agreement as soon as possible.   
36. The representative of Japan  stated that his country was a significant exporter to Bangladesh 
and one of its biggest donors.  Japan had assisted  the implementation of the 2005 Poverty Reduction 
Strategy Paper (PRSP) by supporting infrastructure development.  Japan was committed to providing 
duty-free and quota-free market access to LDCs and supported initiating the "One Village One 
Product Campaign", aimed at promoting investme nt and export in developing countries.  For 
Bangladesh, jute products and tea were among the pr oducts being promoted under this campaign.   
37. His delegation hoped that Bangladesh was conduc ting its structural reforms by using the 
Poverty Reduction and Growth Facility (PRGF) an d the Post-MFA Action Programme, as well as 
addressing alternatives in the export industry and maki ng an effort to diversify away from textiles.  
Bangladesh, a significant player in achieving th e Millennium Development Goals (MDGs), was 
capable of playing an important role in the sustai nable development of Asia by committing to regional 
prosperity and stability through SAARC and BIMSTEC. 
38. Japan appreciated Bangladesh's reduction of customs rates and restricted products, its 
participation in regional trade agreements, the im provement in government revenue by increasing the 
efficiency of the customs office in Chittagong, and the introduction of the Tax Ombudsman system.  Nevertheless, Japan hoped that Bangladesh would in crease substantially the leve l of binding rates and 
reduce the difference between applied and bound rates.   He encouraged further structural reforms to 
improve governance as well as an effort to liberali ze any services sector other than hotel and lodging 
services and telecommunication services.  Regardless of the suspension of the Doha Round of 
negotiations, Japan would, inter alia,  steadily implement its Development Initiative for Trade, 
announced on the occasion of the WTO Hong Kong Ministerial Conference. 
39. The representative of Hong Kong, China
 was pleased that bilateral trade had increased and 
hoped that the growth momentum would continue .  He praised Bangladesh's determination in 
conducting prudent economic policies and trade libera lizing reforms.  Reducing average MFN applied 
tariffs and maintaining only ad valorem  rates for almost all its tariff lines ensured a high degree of 
transparency.  Nevertheless, the low binding cove rage for non-agricultural tariff lines and the large 
gap between average bound and applied tariff rates provided considerable scope for raising applied 
tariffs; this situation maintained a high degree of  uncertainty,  thus discouraging both trade and 
investment.  He encouraged Bangladesh to addr ess these issues, including the observance of binding 
commitments on two items, and to further improve its  tariff regime.  As only about 6% of domestic 
standards were equivalent to international sta ndards, Bangladesh harmonization of the remaining 
domestic standards with the international ones w ould facilitate the flow of foreign trade and 
investment.  
40. Given the importance of the services sector, he urged Bangladesh to undertake progressive 
liberalization of trade in services, which would furthe r economic growth and development.  In light of 
Bangladesh's achievements in pursuing a liberal  trade policy since 1990, his delegation looked 
forward to seeing this liberalization reflected in improvements in Bangladesh’s services offer once the 
DDA negotiations were resumed. 
41. The representative of the European Communities  stated that Bangladesh benefited from the 
Everything But Arms (EBA) initiative, and bilatera l cooperation covered many other areas, including 
development programmes.  Bangladesh's trading relations were moving successfully from aid 
dependence towards a trade-based economy with  a focus on securing investment.  However, 
important challenges, including improvement of basic infrastruct ure and economic governance as well WT/TPR/M/168 
Page 10  
 
  as reduction in poverty and inequalities, remained.  To balance economic and social development, 
trade policy should contribute to more sustainable pr oduction patterns rather than to lower standards; 
the restructuring needed to be managed carefully , focusing on decent work  and also assistance to 
workers during the transition process.  She was inte rested in learning more about Bangladesh's first 
experiences in implementing the Poverty Reduction Strategy. 
42. To further improve the trading environment, continued domestic re form was crucial.  
Strengthening areas such as trade facilitation, comp etition policy or private sector reform in certain 
sectors (transport, finance, telecommunications) would greatly benefit the economy.  The reforms 
could be flanked by the introduction of a framework to increase direct investment and market opening 
towards foreign services providers.  This would di rectly assist Bangladesh's economic development, 
and indirectly support efforts for further diversifyi ng its export base.  Given Bangladesh's dependence 
on RMG exports to a few large markets, the EC ag reed with the recommendation to diversify both the 
export base and export markets. 
43. As Bangladesh pursued bilatera l and regional liberalization in  parallel to the multilateral 
sphere, complementarity between the two appro aches was crucial.  Further enhancement of 
Bangladesh's legal and institutional capacities as well as its regulatory environment would need to be 
supported by technical assistance;  the EC had alr eady offered TRTA and would continue to offer a 
very significant package to Bangladesh.  The Tr ade Policy Review was a good opportunity to jointly 
identify the areas where assistance could be useful.  The EC was interested in learning which areas 
had already been prioritized and which other areas Bangladesh would consider of interest for further 
assistance.  In its new role as speaker of the LDC group, Bangladesh had a very important 
responsibility in the WTO and the DDA negotiations.  
44. The representative of Canada
 encouraged Bangladesh to, inter alia,  pursue efforts to create a 
more favourable commercial climate and openness to foreign investment.  He acknowledged Bangladesh's efforts in tackling corruption, an inte gral part of achieving sustainable economic growth, 
and encouraged ongoing efforts to establish an effective national anti-corruption commission. 
45. Although applied tariffs had been reduced si gnificantly, he encouraged Bangladesh to bind 
outstanding tariff lines and bring bound rates closer to applied rates.  Canada hoped that Bangladesh 
would reduce and/or eliminate non-tariff barriers, wh ich were slowing trade flows to the detriment of 
all concerned.  Greater commitment by Bangladesh to  increased transparency and better prevention of 
contracting irregularities within the public sector would help to address concerns in relation to 
international tenders.  He commended the steps ta ken to strengthen IPR protection and implement 
policies pursuant to the WTO TRIPS Agreement, d espite the ten-year grace period for LDCs.  He 
encouraged Bangladesh to pursue efforts in IPR protection and enforcement of the enacted laws. 
46. The representative of Switzerland
 stated that Bangladesh had been one of the priority 
countries for Swiss development cooperation sin ce 1971.  The priorities of the development 
programme for Bangladesh were education, micro- and small enterprise promotion, sustainable land 
use, and local governance.  
47. She praised Bangladesh's constructive participation in WTO and DDA negotiations and 
acknowledged that its active engagement in mu ltilateral and regional economic arrangements 
reflected its willingness for integration into the world economy.  Switzerland and Bangladesh had a 
common fundamental position in acknowledging that gradual trade liberalization through the WTO 
would ultimately be to the benefit of all.  In this respect, Switzerland was conscious of the 
developmental needs of Bangladesh.  
48. Switzerland welcomed Bangladesh's trade libera lizing reforms.  However, customs tariffs 
could be further improved since they lacked predictability and provided possibilities for the  WT/TPR/M/168 
 Page 11 
 
 
 
 authorities to raise applied rates.  The number and level of other border charges and levies might also 
be simplified and reduced.  Her delegation was interested in receiving the latest 
revision/rationalization of the structure of the tariff and other duties for the Budget 2006/2007, which had recently been completed. 
49. Switzerland commended the considerable efforts to  improve the legal framework for IPRs but 
was concerned that Bangladesh's regime had dete riorated due to insufficient enforcement.  She 
therefore strongly encouraged Bangladesh to bring its legislation into line with the WTO TRIPS Agreement and other international commitments. 
50. The representative of Turkey
 stated that the Bangladeshi economy had grown steadily 
allowing the country to graduate according to  the UN Human Development Index Category.  
However, 36% of the population lived under the pover ty threshold, which was a global challenge for 
international cooperation.  The economy had become  more outward-oriented since its last Review.  
Despite improvements in expanding its export base a nd increasing inward FDI, Bangladesh's level of 
integration into the global trading system had remained low.  Long-standing problems, such as infrastructure, insufficient institutional capacity, a nd legal environment, should be tackled with well 
coordinated liberal de velopment policies. 
51. Regarding Bangladesh's increased participa tion in regional groupings, Turkey and 
Bangladesh had good cooperation within the D- 8 and TPS-OIC frameworks;  regional trade 
liberalization by members of these groupings was co mplementary to multilateral trade liberalization.  
Bangladesh maintained a transparent tariff regime w hose predictability was being tackled at the Doha 
negotiations.  Despite the relatively liberal foreign investment regime, an improved legal framework 
stemming from a genuine policitical determination w ould help to attract more foreign investment. 
52. Bangladesh's exports and employment was hi ghly dependent on the textliles and clothing 
sector, and his delegation fully shared Bangladesh's c oncerns over the possible negative effects of full 
integration of this sector into the rules and discipl ines of the WTO.  From discussions in the relevant 
WTO bodies, Turkey was aware of the importance of this sector for many other developing and least 
developed countries.  His delegation commended th e endeavours of Bangladesh in highlighting the 
significance of this sector and supported a global anal ysis of the facts for appropriate action by the 
WTO and other international organizations.  Issues  relating to the textiles and clothing industries 
needed to be tackled within the WTO NAMA negotia tions with a differentiated approach taking into 
account the specific needs of this sector. 
53. The representative of Australia
 indicated that healthy bilateral trade and investment relations 
were being enhanced by his country's developm ent cooperation programme.  Since 1 July 2003 
Australia had provided duty-free and quota-free acce ss treatment to Bangladesh and other LDCs for 
100% of tariff lines, with simple rules of origin  and a broad approach to developing country 
cumulation criteria, aimed at facilitating market access. 
54. Bangladesh had maintained its growth momentum  since the elimination in 2005 of country 
quotas for textiles in major developed country markets and in the face of pressure from higher oil 
prices.  Despite its economic performance and positive progress on a range of social indicators, 
Bangladesh continued to face the challenges of widespread poverty, capacity constraints, and 
governance issues.  Australia encouraged Banglades h to pursue its tax administration reforms as a 
means to increase its capacity  for revenue collection. 
55. In light of Bangladesh's continuous efforts on trade reform encompassing, inter alia,  the 
customs duty structure and administrative proce dures, his delegation encouraged Bangladesh to 
engage in further reforms, particularly to promote the sustainable increase of its export WT/TPR/M/168 
Page 12  
 
  competitiveness.  As Australia and Bangladesh had a shared interest in a strong and open MTS, he 
particularly acknowledged the active participation of Bangladesh in the Doha negotiations.  Both 
countries were of the view that the development obj ectives of the Doha Round could be best achieved 
by substantially improved market access across all ar eas of the negotiations.  Australia joined others 
in highlighting the importance of an ear ly resumption of the Doha negotiations. 
56. The representative of Brazil
 commended Bangladesh for its firm commitment to the 
attainment of the MDGs, i.e. halving by 2015 the number of people living below the poverty threshold 
of US$1 per day.  Bangladesh was undergoing a very positive transition from a predominantly agrarian society to an industrial and services economy.  Bangladesh had, inter alia,  modernized its 
economy, increased the share of manufactures in its exports, expanded its share in global trade, and 
created an environment that was safer and more attractive to foreign investment.   
57. When reviewing Bangladesh's trade policies a nd considering its WTO obligations, Members 
should acknowledge not only its achievements but its situation as an LDC requiring special 
consideration and support from all WTO Member s.  Brazil was confident that duty-free and 
quota-free market access for LDCs had furthe r improved conditions fo r the development of 
Bangladesh's economy, contributing to consolidati on of its industrial base  and extension of its 
exports.  Brazil was working on its own duty-free, q uota-free initiative for LDCs that would lead to 
further development of its bilateral trade flows.   Similar initiatives of other developing countries 
would raise the contribution of South-South trade to the development of Bangladesh. 
58. Bangladesh had made progress in agriculture by  strengthening its food security situation, 
attaining a surplus of cereals, reinforcing the role  of the private sector, and removing barriers to the 
functioning of the market for agricultural imports and fertilizers;  however, subsidies to agricultural 
exports had been introduced.  Brazil encouraged Bangladesh to continue improving its agricultural 
market.  He commended the reduction in the numbe r of import restricted goods.  To deepen the 
country's insertion in global trade, he encouraged further cuts in the number of banned or restricted 
goods under the control list of imports.  
59. The representative of Singapore
 indicated that bilateral tr ade with Bangladesh had been 
expanding steadily.  Singaporean companies had invested in, inter alia,  chemicals, engineering and 
textiles.  Despite the global economic downturn in  2001 and 2002, there had been a positive trend of 
industrialization and inflows of investments to  Bangladesh.  Bangladesh had placed trade as a 
centrepiece of its development strategy and povert y reduction efforts, an indication of its strong 
commitment and desire to further integrate w ith the global economy.  Given its increasing trade 
volumes and linkages with the global economy, Bangla desh had a stake in furthering the rules-based 
MTS;  it would benefit from pursuing liberal economic and trade liberalization policies and 
continuing its support for the WTO/DDA process.  
60. Although Bangladesh had ensured a high degree of transparency by using ad valorem  duties 
for almost all of its tariff lines, and had reduced  the average applied MFN rates, she encouraged 
Bangladesh to provide more certainty for businesses  by increasing its bindings level and narrowing 
the difference between bound and applied rates. 
61. The representative of India  stated that the micro-credit programmes in Bangladesh had been 
of special interest to his country.  Bilateral economic and commercial cooperation had progressed 
satisfactorily;  while Indian exports had grown by 77% in 2001-05, Bangladesh's exports to India, had 
grown by around 400%.  Bangladesh was the only ge nuine beneficiary of India's LDC-only SAFTA 
preferences, since Nepal and Bhutan had lo ng had duty-free access to India's market under 
pre-existing bilateral treaties.    WT/TPR/M/168 
 Page 13 
 
 
 
 62. Given the historical links and contiguity between the two co untries, the present level of 
bilateral trade did not fully capture the potential.  He elaborated on several constrains and suggested 
ways to generate revenue for both Governments.  Steps needed be taken to improve trade-related 
infrastructure such as land customs stations, appr oach roads, missing railway links, banking and 
communication facilities, construction of warehouses, increasing containerization, etc.  The 
provisions on transhipment cargo under the bilatera l Protocol on Inland Water Transit and Trade 
should be implemented.  Bangladesh did not a llow access to the Chittagong port for goods from the 
north-eastern states of India, which had to cove r long distances to bypass Bangladesh.  With the 
forthcoming inauguration of the new mooring containe r terminal at the Chittagong port, he hoped that 
Bangladesh would allow the neighbouring Indian stat es to use the excess capacity of the Chittagong 
port.  Biman, Bangladesh's state monopoly on ai r cargo facilities, had limited service capacities, 
which restricted the movement of consignmen ts by air.  Conclusion of a Memorandum of 
Understanding between the Bangladesh Standards and Testing Institution and the Bureau of Indian 
Standards to establish cooperation in standardizati on, certification, calibration and measurement, etc., 
would speed up the process of certification of Bangl adeshi products entering the Indian market.  As 
India had already initiated improvements in several areas he hoped that it would be possible for 
Bangladesh to take an early decision on these issues. 
63. Referring to the partial lifting of the 2002 prohib ition of the land route for Indian exports of 
cotton yarn, milk powder, rice and sugar, he urge d the Bangladeshi authorities to fully restore the 
more economic land route for Indian  exports of these products to Bangladesh.  Bangladesh restricted 
imports of drugs from India under a notification (dat ed 18 April 2005) allowing imports only of drugs 
registered under the same brand name in at least one of a list of develope d countries;  he urged 
Bangladesh to review this measure so as to enable high quality, low priced Indian drugs to reach the 
consumer.  He asked Bangladesh to address the issue of non-payment (of a number of Indian 
exporters) against irrevocable L/Cs by various banks in Bangladesh;  the amounts involved were 
substantial and the matter had caused serious  concern among Indian exporters.  He sought 
clarifications on the imposition of a discriminatory 15% VAT on imported goods.  
64. Under the EC regional cumulation rule, apparel ma nufacturers were eligible to use fabrics of 
regional origin for production of ga rments and still benefited from zero tariff access to the EC market 
under its GSP Scheme.  However, Bangladesh had not yet published this provision in its Government 
Gazette .  Bangladesh had been issuing GSP certificat es of origin only to apparel shipments 
manufactured from locally procured fabric.  This had inhibited exports of fabric from India to 
Bangladesh.  Further, a 15% VAT was charged by Bangladesh on imports of viscose staple fibre 
(VSF) as against zero VAT on imports of cotton, polyester staple fibre (PSF) or acrylic.  This affected the cost of using viscose fibre and exports of VSF fro m India.  It also affected the competitiveness of 
Bangladesh for many popular VSF blends. 
65. In light of important synergies and complement arities between India and Bangladesh in many 
sectors, there was need to develop the relationshi p further.  He hoped that the Government of 
Bangladesh would make every effort to put b ack on track a currently suspended US$3 billion 
investment project signed between Bangladesh's stat e-run Board of Investment (BOI) and an Indian 
industrial house in October 2004.  
66. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu 
(Chinese Taipei)  indicated that Bangladesh was Chinese Taipei's largest export market among all the 
LDCs, and its foreign investment activities in Banglad esh had grown to quite a substantial level;  the 
textiles sector had been the main driv ing force for this bilateral relati onship, but he believed that close 
economic links would soon be strengthened in other areas. WT/TPR/M/168 
Page 14  
 
  67. He admired the achievements of Bangladesh since the phasing-out and removal of 
MFA/ATC-related quotas, but stated that the ch allenge was far from over.  Chinese Taipei was 
interested in working with Bangladesh to help e nhance the international competitiveness of its textile 
industry, in areas such as adopting modern m achinery and equipment, and conducting joint R&D 
projects.  Furthermore, the potential of the priv ate sector in Bangladesh remained under-exploited, 
mainly due to the difficulty in implementing a pr ivatization policy.  Chinese Taipei was happy to 
share with the Government of Bangladesh its experiences with respect to SMEs, the major source of innovation and creativity. 
68. The representative of Benin
 stated that as Bangladesh and Benin were both LDCs they shared 
similar concerns regarding their ec onomic development and in tegration in world trade.  He identified 
the strategy, policy, and measures that contributed  to Bangladesh's achievements in several areas, 
including poverty reduction, strengthening of region al integration ties, customs administration, and 
customs tariff transparency,  over recent years.  He commended the performance of the manufacturing 
sector and noted the dominant influence of the services sector in the Bangladeshi economy.  The 
importance of Bangladeshi workers remittances fro m abroad was indicative of the significance of 
GATS mode 4 commitments (presence of natural pe rsons) for LDCs.  He acknowledged Bangladesh's 
disaster prone situation and successful transition in the post-MFA/ATC era.  He called on all trading partners to support the authorities in their efforts to increase Bangladesh's participation in the MTS, 
promote development, and reduce poverty. 
69. The representative of Pakistan
 recalled, inter alia,  the bilateral ties of his country with 
Bangladesh as well as their common membership of SAARC, OIC, and D-8.  Although bilateral trade 
volume had doubled during the last five years, it re mained limited to few product categories.  He 
hoped that, by making progress on regional pr eferences, bilateral trade would grow. 
70. He highlighted the main positive achievements of prudent macroeconomic policies during the 
period under review, including custom s and tax reforms, floating excha nge rates, privatization, and 
graduation from a low to medium rating in the UN human development index.  Bangladesh relied on 
indirect taxes for over 80% of its total tax revenue;  indirect taxes had a negative impact on the poor 
and thus affected reduction of pove rty levels.  Low tariff binding coverage was always tempting to 
reverse tariff reforms, tariff rates of 40 items at th e eight-digit tariff level ha d been revised upwards.  
Bangladesh operated a number of local-content sch emes, which not only upset domestic consumers 
but also hurt exports. 
71. The representative of Sri Lanka  was pleased to note that Bangladesh had progressed well 
since 2000 in spite of a number of constraints.  In addition to the in frastructure bottlenecks, 
Bangladesh also had to face the challenges of the expi ry of the ATC.  Despite efforts to improve trade 
relations through several regional integration in itiatives (e.g. APTA, SAFTA, BIMSTEC), Sri Lanka's 
trade with Bangladesh remained almost insignificant,  mainly due to the lack of complementarity in 
their respective exports of very similar products.  Trade liberalization alone would not lead to the 
expansion of exports or trade. 
72. Despite the costly business environment and th e risk arising from the expiry of ATC quotas, 
Bangladesh's apparel industry had attracted la rge inflow of FDI, including from Sri Lankan 
industrialists who had expected to take advantage of the duty-free access to developed country 
markets, particularly the EC and Canada.  H eavy dependence on one industry required the close 
attention of the economic policy planners. 
73. Bangladesh was heavily dependent on garmen t exports, which were open to strong global 
competition, thus it was difficult to understand its reasons for not taking advantage of the regional 
cumulation facility in the EC rules of origin, which provided for cumulation of origin for intermediate 
inputs obtained from member states of SAARC.  In  addition, the EC had offered expanded regional  WT/TPR/M/168 
 Page 15 
 
 
 
 cumulation, through a process of cross-regiona l cumulation between SAARC and ASEAN.  These 
arrangements would help exporters in Bangladesh  to achieve higher utilization of the EC-GSP 
scheme.  While Bangladesh was now reluctant to take advantage of these arrangements, it had 
advocated global cumulation for LDCs in the WTO negotiations. 
74. The representative of Ecuador  noted the transition of Bangladesh  from an agrarian towards an 
industrial economy.  Policy developments, includi ng the increased port security and protection of 
IPRs, contributed to raising investors confidence, wh ich in turn was reflected in the increase of private 
sector activities.  She praised Bangladesh's economic  policies, improvements in the legal framework 
and especially the support to micro-credit, which was also used in Ecuador.  The micro-credit facility 
was a good survival strategy for achieving the MDGs.  To reduce dependencies and take advantage of 
trade openings, it was important to diversify.  There was a long way to go but the authorities were 
taking the necessary steps. 
75. The representative of Zambia  noted Bangladesh's steady progress in a number of economic 
sectors, mainly manufacturing, construction, and tr ansport, storage and communication, despite the 
impact of global and natural upheavals.  Legal and regulatory reforms might also have contributed to 
this outcome.  Ensuring full implementation of and conformity to the various obligations under the 
MTS was a gradual process.  In view of the limited resources and socio-economic needs of most LDCs, he urged the development pa rtners to continue to support and encourage Bangladesh in its 
efforts to be fully integrated in the MTS. 
76. The representative of China
 highlighted various aspects of th e rapid development of bilateral 
trade and investment with Bangladesh.  There ha d been a robust increase of Bangladeshi exports to 
China as a result of its accession to APTA, and the duty-free access granted to a variety of 
Bangladesh's major traditional exports, including textiles, frozen food, leather, and jute.   China was 
particularly encouraged by Bangladesh's strong w ill to pursue trade liberalization and facilitation, 
which helped to raise its export competitiveness.  China was pleased that Bangladeshi textile and 
clothing exports had sustained growth, in particular  in the EC market, after the completion of the 
transitional period under the ATC.  It hoped that these achievements and efforts could be further 
expanded so that more people would be  lifted out of poverty in Bangladesh. 
77. The representative of Norway  stated that, while there was more  work to be done, much of the 
progress so far showed that Bangladesh was taki ng responsibility for its own economic future.  
Bangladesh had simplified and rationalized its tariff st ructure, and traders had the advantage of having 
to consult only a single type of rate, the applied MF N.  In light of the very low binding ratio in the 
non-agricultural sector and the relatively high gap between bound and applied tariffs, Norway 
encouraged Bangladesh to raise the binding ratio in order to increase predictability for traders.  The 
legal and regulatory framework for the telecoms  sector had been updated twice since 2000, and he 
encouraged the authorities to continue to improve th e long-term predictability in the framework itself, 
and to make the process of regulatory change more transparent.  Thus a sectoral concern was also 
closely linked to the regulatory framework of FDI.  
78. The representative of Malaysia  noted Bangladesh's comprehensive poverty reduction strategy 
and the deepening of its preferential treatment a nd regional integration ties.  He hoped that the 
declining trend of poverty would continue so as to halve the proportion of the population living below 
the poverty line by 2015.  As host to a sizable  workforce of Bangladeshis, Malaysia noted the 
significant contribution of foreign employment a nd worker remittances to Bangladesh's economic 
development.  Malaysia, a deve loping country, had unilaterally provided duty-free and quota-free 
access for more than 98% of LDC exports. WT/TPR/M/168 
Page 16  
 
  V. REPLIES BY THE REPRESENTATIVE OF BANGLADESH AND ADDITIONAL 
COMMENTS 
79. The representative of Bangladesh
 stated that the Trade Policy Review had been a unique 
learning process and wished to place on record his d eep appreciation and gratitude to all participants 
for making the TPRB meeting an animated and lively exercise.  His delegation had tried its best to 
answer questions with utmost care and attention.   If anything remained unanswered, it would be 
addressed in due course.  He would answer th e questions under three main headings:  (i) 
macroeconomic and instituti onal environment;  (ii) trade policies by measure;  and (iii) sectoral 
policies.   
(i) Macroeconomic and inst itutional environment 
Economic growth and sustainable development  
80. The representative of Bangladesh  stated that Bangladesh had been pursuing a policy to ensure 
economic growth along with a reasonable rate of di stribution with a view to increasing employment 
and reducing poverty.  Pragmatic trade, fiscal, and m onetary policies with significant liberalization of 
trade and phenomenal expansion of exports and remittances, congeni al domestic and FDI 
environment, increased involvement of the privat e sector in economic activities, and the country's 
success in checking population growth  had largely contributed to th e success.  Growth, in turn, had 
resulted in a steady increase in per capita GDP a nd a declining trend in the number of population 
below the poverty line.  In order to increase operati onal efficiency and capacity building, and thereby 
ensure sustainable development, the Government  had undertaken wide-ranging reforms in the fiscal, 
monetary, financial, and other sectors.  There ha d been initiatives to mode rnize the Customs, VAT 
and income tax administration, and improvement of  the public expenditure system.  Tariff structure 
had been simplified with lowering of the peak duty rate as well as the number of slabs.  Quantitative 
restrictions had been withdrawn on a number of pr oducts.  In the financial sector, measures had been 
taken to enhance the monitoring capability of Bangl adesh Bank and to improve internal control and 
the capacity for monetary management.  Private se ctor participation had been encouraged both in 
domestic and external trade.  These policies and re forms had resulted in a gradual decline of the 
budget deficit, a high rate of export and import growth, current account surpluses for 
three consecutive years, steady rise of foreign currenc y reserve to a satisfactory level, and increased 
FDI flow.  The Government considered that the c ontinuation of policy reforms would make it possible 
to sustain current economic growth.  
81. The monetary sector reforms consisted of pursuing accommodative and cautious monetary 
policy, enhancement of the cash reserve requirement, effective use of repo and reserve repo, 
introduction of a floating exchange rate, facilitation of increased credit flow s to agriculture, and 
availability of adequate export cred it.  The financial sector reforms comprised capacity building of the 
central bank through a massive programme of automation, human resources development, and 
qualitative improvement of the Research Department through establishment of a Policy Analysis Unit 
(PAU), introduction of the Money Laundering Pr evention Act, 2002, and modernization and 
privatization of the nationalized commercial banks.  The fiscal sector reforms included, inter alia,  
establishment of a separate resource and debt ma nagement wing in the Ministry of Finance, 
appointment of a Tax Ombudsman, es tablishment of a Central Intellig ence Unit and Large Tax-payers 
Unit.  Major reforms in other sectors comprised formation of a National Coordination Council to 
address the problems of the RMG sector, introduc tion of an EPZ Workers Association, and the 
Industrial Relations Act 2004 to ensure the right s of the workers, introduction of e-governance and 
online service tracking in BOI, privatization progra mme for SOEs, and the Anti-corruption Act 2004.  
82. Sustainable development was Bangladesh's prim e objective.  A balanced domestic and trade 
policy was the most important tool to foster development.  Conducive trade policy boosted export  WT/TPR/M/168 
 Page 17 
 
 
 
 earnings and in turn promoted industrialization a nd generated employment.  Employment of a large 
number of women in the export oriented industries,  RMGs in particular, had contributed to women 
empowerment, thus reducing poverty and facilitating sustainable development.  The emphasis was on 
growth and expansion of trade.  Increasing e xports would enhance the production base and open up 
avenues for establishment of backward linkage industries, creation of employment opportunities (for 
both males and females) and generate income.  Th e Government could thus mobilize more resources 
for health care, nutrition, basic education, a dult literacy, and sanitation.  The socio-economic 
development had resulted in greater participa tion of the population in protecting the natural 
environment to ensure sustainable development. 
83. Economic prosperity should be commensurate w ith efforts to maintain environmental and 
ecological balance.  The authorities were attempti ng to coordinate environm ental and other policies 
including trade policy:  trade and other nationa l policies were reviewed periodically and any 
necessary changes were introduced to make them co mpatible with the Environmental Policy 1992.  
An environmental impact assessment was mandato ry for any new project before its initiation. 
Export diversification 
84. Despite difficulties in encouraging more priv ate run enterprises and lack of high-tech 
low-cost public services, the performance of the ex port sector had been praiseworthy.  Market access 
opportunities in all developed a nd developing countries through duty-free quota-free market access, 
the key concern for the LDCs, would further impr ove Bangladesh's export performance and help to 
diversify its export base.  Bangladesh would deeply appreciate the granting of such treatment for all 
LDCs by developed and developing countries. 
85. Bangladesh was heavily dependent on textiles expor ts, for which markets were limited.  This 
had made Bangladeshi exports vulnerable to extern al shocks in an extremely competitive global 
environment.  Certain policy initiatives had been take n to diversify the export baskets and markets.  A 
number of non-traditional items having high export potential and special development sectors had 
been identified in the current export policy.  Va rious promotional measures including easy credit 
facility, air transport facility, assistance in market e xploration and securing join t-venture partners was 
being provided to exporters of new products.  An  Export Promotion Fund (EPF) had been set up to 
support producers/exporters of new and non-traditional  items.  In order to diversify export markets, 
the Export Promotion Bureau (EPB) had organized single country trade fairs in the Russian Federation, Australia, Myanmar, Nepal, and China.  Special marketing missions were sent to African 
countries to explore the export potential for Bangladeshi pharmaceutical products. 
86. Bangladesh's diversification strategy had al so encouraged private sector initiatives for 
developing agri-based and agri-processing industries as well as the establishment of SMEs and 
cottage industries.  In addition, the Government  attached importance to setting up special economic 
zones in various parts of the country.  It also ai med to improve the quality of  industrial products to 
international standards and enhance productivity in  the industrial sector.  The Industrial Policy 
stipulated that the Tripartite Consultation Coun cil (government, owners, trade unions), National 
Productivity Council, and other nationa l-level organizations would help  to formulate action plans to, 
inter alia , generate employment, enhance productivity and develop capacity.  
Governance 
87. A Chairman and two Commissioners had been a ppointed to increase the effectiveness of the 
National Anti-Corruption Commission.  The Commissi on had been reorganized with 650 posts so that 
it could discharge its functions effectively. The Pu blic procurement Act had also been enacted to 
reduce corruption in public procurement. WT/TPR/M/168 
Page 18  
 
  Tax reforms 
88. In order to reduce over dependence on indirect ta xes, measures were bei ng taken to gradually 
reduce dependence on import duty as the major source of revenue collection.  Several initiatives had 
been discussed in his opening statement and earlier.  The Government had substantially expanded the 
VAT and income tax net and was committed to conti nuing with this process.  Capacity building and 
extensive automation efforts were also under way to  enhance the quality of service as well as to 
upgrade the professional skills of the revenue officials.  
Privatization initiatives 
89. The Privatization Act 2000 was enacted to ma ke the privatization process and programme 
more effective.  Since 1993, 65 SOEs had been  handed over to the private sector (25 since 
November 2001).  Of those, 44 had been privatized through direct sale, and 21 through the sale of 
shares.  Seven more enterprises had been selected for privatization.  The Privatization Commission had identified 98 manufacturing SOEs  (25 jute, 22 textiles, 22 steel/engineering, 14 sugar/food and 
10 chemical sector firms) for privatization.  In addition, the Government was encouraging private 
investment in certain activities previously  confined to the public sector (see below). 
90. In order to mitigate the adverse effect of SOE closures, workers losing their jobs were 
compensated through a Voluntary Separation Sche me.  Training and retraining facilities had been 
provided to develop their skills.  Efforts were being made to give priority to the retrenched workers 
for their rehabilitation, including a special fund under a micro-credit programme;  a total of Tk 422.85 million had already been disbursed among 8,058 workers under this programme.  Since 
July 2004 a total of 5,852 workers had received training.  
FDI and competition policy 
91. Bangladesh had adopted a policy of promoting infrastructure development through a specific 
legal framework for private investment, the Priv ate Sector Infrastructure Guideline (PSIG).  
Investment was well protected by a legal framework providing for, inter alia , equal treatment, 
safeguards from state expropriation, capital/prof it repatriation assurance, and easy exit.  FDI was 
encouraged in all sectors except for four reserve sectors (arms a nd ammunition, printing of currency 
notes, nuclear power generation and mechanized destruction of forests).  Private sector project approval – both FDI and local – was appraised in th e light of project feasibility (technical, financial, 
and marketing), environmental impact, ma rket orientation, and national security. 
92. Following government initiatives to attract FDI, foreign investment in Bangladesh had risen 
from US$328.3 million in 2002 to US$845.3 million in 2005, more than 157% increase in three years.  
It was believed that the preferential market access accorded to Bangladeshi exports by many 
developed and developing countries was among the key deciding factors for a number of FDI projects 
in sectors such as textiles and clothing, and bicycles.  FDI inflows were expected to continue to rise if 
preferential market access was strengthened. 
93. Most of the issues raised by India, whose comments and observations were greatly 
appreciated, were bilateral in nature.  These w ould be examined in a spirit of friendliness and 
brotherliness so that they could be resolved to mutual satisfaction.  
94. Bangladesh had been continuously trying to enhance its business competitiveness.  It had 
undertaken a number of measures to reduce the ti me required for project approval, such as an 
effective one-window service, a national task force to address foreign investors' complaints, online 
services for tracking progress of the case.  The "W orld Bank Doing Business Indicators 2006" showed 
that Bangladesh had improved its competitiveness in  some indicators.  With a view to reducing  WT/TPR/M/168 
 Page 19 
 
 
 
 barriers related to business competitiveness, the G overnment was identifying these barriers preparing 
a plan to address them.  The authorities were al so examining the possibility of introducing a 
competition law. 
Trade related technical assistance 
95. Since 2000, several steps had been taken to im prove the institutional and human capacities to 
handle WTO issues.  A WTO Cell and an Interna tional Trade Cooperation Wing had been established 
respectively in the Ministry of Commerce and th e Bangladesh Tariff Commission.  A WTO advisory 
Committee also met regularly.  A new institution, th e Bangladesh Foreign Trade Institute, had started 
preparatory work for research on WTO issues and disseminating knowledge on international trade 
issues to the private and public sector; the EC  was funding a project to increase its capacity. 
96. Traditional technical assistance had had a positive impact on Bangladesh’s capacity to 
participate in the trade negotiations and to im plement WTO obligations.  However, available 
resources were still not adequate for Bangladesh to re present itself in the WTO in an efficient manner.  
Meaningful technical assistance was important to remove Bangladesh's supply-side constraints and 
integrate its economy into the global ma rket.  Main TRTA priorities were: 
- to improve operations of the testing labor atories and help them meet the TBT and 
SPS requirements and other international standards;  
- to develop a national quality policy and in stitutional arrangements to assist in 
monitoring quality control measures; 
- to develop an infrastructure and marketing support system to fully integrate supply 
chains for vegetables and fruits, includi ng reliable processing, storage, and 
transportation capacities at the local and national level, focusing on product 
standardization, food safety, and sanitary and phytosanitary measures; 
- to help reduce the cost of doing business through development of port and physical 
infrastructure; 
- to assist product and market diversification; 
- to enhance human and institutional capacity. 
97. Bangladesh had been among the first countries of the IF initiative.  However, no funding had 
been available for the projects submitted.  Upon introduction of the pilot scheme in 2001-02, funds 
had been inadequate to meet the needs of all LD Cs, and Bangladesh had offered to let other more-
needy LDCs to take advantage of IF first.  Banglad esh might join the enhanced  IF, if the funding and 
administrative requirements were appropriate. 
98. Concerning the comprehensive trade needs analysis and action programme that was being 
prepared on Bangladesh by the EC Commission, the authorities felt that trade-related action should be 
derived from the specific needs in the context of improved market acc ess; product and export 
diversification; supply-side constraints and trad e-related capacity development.  When the final 
version of the study was available his Government  would take appropriate action.  Bangladesh was 
ready to cooperate with any development partne r to take advantage of  appropriate funding and 
assistance. WT/TPR/M/168 
Page 20  
 
  99. Bangladesh firmly believed that a successful c onclusion of the Doha Round with an effective 
package to address developmental needs would assist its  efforts to meet the MDGs.  As a coordinator 
of LDCs, Bangladesh was ready to work with othe r WTO Members to resume the Doha talks as soon 
as possible.  
(ii) Trade policies by measure 
Trade facilitation measures and related technical assistance needs 100. As regards trade facilitation, Bangladesh had de veloped a Strategic Development Plan under 
which a Modernization and Automation Project of the National Board of Revenue (NBR) had been 
initiated.  After full implementation of this project, trade procedures would be significantly simplified.   
101. One of the cardinal objectives of the Moderni zation and Automation Project was to strengthen 
the management capability of the NBR.  Under a new audit system, external audits alongside internal 
audits were restructured and revamped by recr uitment of qualified professionals and automation of 
procedure.  Self-assessment procedures had been  introduced for speedy clearance of consignments; 
product coverage for self-assessment would be broadened as soon as the necessary infrastructure 
support was ready.  Red and yellow channels were  introduced in February 2000 with a view to 
avoiding unnecessary delay in clearance;  10% of total consignments were now selected for red 
channel or physical inspection (on a risk management basis by computers).  This had significantly reduced the customs clearance time  and helped trade facilitation.  To reduce smuggling, efforts had 
been made to increase the number of border security forces, tighten the security, develop 
infrastructure of the land port facilities, and reduce import tariffs.  
102. One of the main reasons for congestion at Chittagong port was that more than 80% of the 
sea-borne cargoes were handled there, whereas M ongla port handled 20%, and remained largely 
under-utilized.  To enhance capacity, remove conges tion, and accelerate the movement of cargo at 
Chittagong port, Bangladesh had undertaken a technical assistance project to examine all regulatory 
issues;  these would be streamlined taking into  consideration WTO aspects.  Bangladesh was 
expecting a feasibility study on a massive programme to establish a deep sea port. 
Customs tariff matters  
103. The incidence of changes in tariffs in between  budget sessions of the Parliament had declined 
significantly during the last five years.  The N BR and the Bangladesh Tariff Commission had initiated 
work to make the customs tariff more simple and transparent. 
104. Regarding the existence of differential rat es within the same sub-heading, there were 
5,224 sub-headings in Bangladesh's HS nomenclature of which 4,889 lines (93.6%) had single rates.  
Only 335 lines (6.4% of total sub-headings) had mu ltiple rates within the same sub-heading and this 
small percentage was unlikely to cause any uncertain ty or give rise to disputes.  Regarding peak 
tariffs, products subject to a tariff of 25% were listed in the WTO Secretariat report.  If a 15% tariff was considered as the threshold level for de fining the peak, this list seemed exhaustive. 
105. As regards the importers' preference for referring disputes to the High Court rather than to the 
Customs, Bangladesh was a vibrant democracy where the judiciary enjoyed complete independence.  
Traders could refer their disputes to the higher judiciar y for quick relief.  This was also true of other 
sectors, including law and order, land distri bution, communication, and infrastructure.  WT/TPR/M/168 
 Page 21 
 
 
 
 Other (border and internal) duties, taxes and ch arges;  pre-shipment inspection regime  
106. Under the VAT Act 1991 the supplementary duty  was being levied on luxury goods and on 
goods that were undesirable on social, moral, and relig ious grounds.  It had been extended to other 
products in 2000, when Bangladesh started impl ementing the WTO Agreement on Customs Valuation 
and abolished the minimum value system.  This  was done to avoid revenue loss due to under-
invoicing.  However, the Government had been gradually reducing the number and rates of the 
supplementary duty.  At present, supplementary duti es were levied on 1,055 items;  the rates on the 
majority of these products were 15% or 25% (inc luding some textile items and mineral water). 
107. The 1.5% advance trade VAT (ATV) on domestic pr oducts was collected at retail outlets.  As 
the producers issued invoices indicating the names,  addresses, and VAT registration numbers of the 
buying entities (copy sent to local VAT office), VAT inspectors could track the transactions and 
ensure the payment of the ATV.  However, importe rs used different addresses for their operations and 
once goods were out of the port, it was difficult to track them due to the absence of dependable systems (e.g. social security number, etc.).  Automation of the VAT administration and management should eliminate this collection deficiency. 
108. The regulatory duty was imposed temporarily and expired automatically at the end of the 
same financial year unless it was re-imposed.  As of September 2006, there was no regulatory duty in 
place. 
109. The maximum value concept or floor level for PSI  was devised to facilitate trade.  To avoid 
complications and for faster movement of certain  goods, small parts or sp ares for factories and 
samples by the apparel industries were kept outside  the purview of PSI; these imports did not require 
an L/C and were under a warranty package.  Risk assessment was carried out routinely for all 
consignments including those exempt from PSI on se lectivity criteria.  In case of misconduct the PSI 
companies were subject to penalties according to the existing procedure; they had the right to appeal to the higher courts of Bangladesh.  No informa tion on the number of cases of PSI misconduct and the 
average amount of penalty was readily available.  The appointment of a PSI Audit agency was under 
way.  Upon the installation of container scanne rs (and development of information technology 
infrastructure) by the Customs within the next 2-3 years, the PSI system could be phased out.  The 
contract with the PSI companies would expire in September 2008. 
WTO tariff and other duties and charges binding commitment  
110. The mismatch between the applied MFN tariff ra tes and the bound rates for vanilla beans and 
sparking plugs for aircraft and helicopters was due to changes in tariff nomenclature.  To remove this 
mismatch, new HS codes would be inserted as soon as possible.  Regarding the binding on other 
charges and duties, a review initiated by the N BR and the Bangladesh Tariff Commission would be 
completed soon. 
111. Concerning the binding coverage and the gap be tween the bound and applied tariff rates, as 
per agreement reached under the July 2004 Fram ework, Bangladesh was actively examining the 
possibilities to expand coverage and reduce the gap.  He also recalled that Bangladesh had gradually 
reduced the tariffs over the period under review  and was committed to continue the process. 
Duty and tax concessions  
112. The Government believed that the import and ex port regime was not complex.  Procedures 
had been consistently simplified, resulting in stead y growth of imports and exports.  The authorities 
considered that measures, such  as assistance to exporters though concessional rates, duty drawback, WT/TPR/M/168 
Page 22  
 
  special bonded warehouse, export processing zone, expor t subsidies etc. were required in order to 
increase the competitiveness of exporters.  Exemp tions for electronic parts no longer existed.  
Pharmaceutical raw materials c ontinued to benefit from certain exemptions.  The NBR, in 
consultation with the Bangladesh Tariff Commissi on, had undertaken an exhaustive study on the duty 
concession schemes.  
Relaxation of regional cumulation criteria and other preferential rules of origin  
113. The representative stated that the EC and others  who made and enforced rules of origin knew 
well their implications.  Bangladesh's current policy in this area had encouraged the growth of the 
textile industry, now one of the country's fastest growing industries.  Many  LDCs were not in a 
position to take advantage of duty-free market access, as the rules of origin were too restrictive; they 
required both relaxation and simplification.  Bangl adesh looked forward to engaging in the EC's 
current revision process for its rules of origin for LDCs. 
114. The Export Promotion Bureau issued certificates of origin on any products eligible for 
preferences in a foreign market; the recognized  chambers of commerce and industries issued 
certificates of origin for the non-eligible products. 
Import restrictions and licensing  
115. Since its last Trade Policy Re view Bangladesh had reduced the number of items under the 
control list from 122 to only 24;  restrictions on 34 items at the four-digit HS level, which were 
maintained under BOP provisions, were removed as  per the phase out plan submitted by Bangladesh 
in 2000.  In addition, out of the four products (eggs, chicks, salt, carton), for which Bangladesh was 
allowed to maintain restrictions until 2009, the rest riction on carton had alrea dy been lifted and others 
were likely to be removed within the agreed time  frame.  He recalled that it was not Bangladesh's 
intention to invoke Article XVIII:B for balance of payment (BOP) reasons:  Bangladesh had formally 
proposed invoking Article XVIII:C of GATT 1994.  However, in a spirit of accommodation, and at 
the request of some countries including the United States, Bangladesh had agreed to invoke Article XVIII:B, which refers to BOPs.  Therefore, it would be unk ind to blame Bangladesh for being 
the only WTO Member to maintain BOP restrictions.   
116. Prior approval and permission were required for imports of a number of products mainly for 
security, health, and environmental reasons.  Replies to the questionnaire on import licensing 
procedures had been submitted on 4 April 2005.  However, information regarding the detailed 
procedures would be sent to the WTO through a r esponse to the relevant questionnaire as soon as 
possible. 
117. Import permits or clearance permits were issued  for release of goods in  certain cases, where 
import was permitted without an LCA form or the opening of an L/C.  In these cases, import registration certificates were not required.  Import permits were i ssued for authorized imports of 
goods on payment of normal duties, while clearan ce permits were for unaut horized imports of goods 
on payment of normal duties plus a penalty. 
118. In addition to items listed in the WTO Secretar iat report, refined, bleached, deodorized (RBD) 
palm stearine and tallow, second- hand/reconditioned machinery, and recovered paper and paper waste 
could be imported by regist ered industrial consumers. 
119. An import registration certificate (IRC) was valid  for one year (renewable every year) and 
subject to registration fees.  Several documents were required to apply for IRCs including a trade 
licence, membership certificate from the recognized chambers/associations, ta x identification number, 
bank solvency certificate, treasury challan, nationality certificate, etc.  Industrial consumers needed to  WT/TPR/M/168 
 Page 23 
 
 
 
 produce additional documentation, including their memorandum of association, and a 
recommendation from the BEPZA for industries locat ed in EPZs.  An "industrial consumer" was a 
recognized industrial unit registered as an indu strial importer under the Importers, Exporters and 
Indentors (Registration) Order 1981.  An importer was not allowed to transfer the import registration 
certificate to another importer.  Recommendations were provided upon registration of the industrial 
unit with the sponsoring authority.  There was no report of corruption. 
120. The preparation of Export Policy and Import Po licy Orders was at the final stage and these 
would be published shortly. 
121. Regarding a question from one Member about restrictions imposed on trade with that 
Member, Bangladesh was aware that Members had impos ed several types of restrictions from time to 
time including sanctions and blockade.  At an a ppropriate moment, Bangladesh would consider any 
such restrictions in place and would deal with them accordingly.  
Standards, SPS and labelling matters  
122. The Bangladesh Accreditation Act 2006 had been passed by the Parliament on 16 July 2006.  
Accreditation would be used in Bangladesh for conformity assessment on a voluntary basis.  
Bangladesh would recognize accreditation performed by other competent bodies only after entering 
into mutual recognition arrangements with the new Bangladesh Accreditation Board, established on 
3 September 2006 as an autonomous body. 
123. Various SPS measures were taken under diff erent acts and enforced by different 
ministries/departments.  In the future Bangladesh  would notify its draft SPS measures to the WTO 
once these were prepared.  Fumigation and/or other treatment were internationally accepted practices 
to prevent the spread of store grain pests;  this requirement had been in place since the introduction of 
the Destructive Insects and Pest Rules 1966, and was in line with the International Plant Protection 
Convention 1999.  
124. The Product Labelling Policy 2006 would be published shortly and notified to the WTO;  
relevant implementing laws and ru les would be prepared or amende d in due course.  There were 
15 product classifications in the Policy;  inte rnational standards would be used for these 
classifications, wherever applicable. 
Local-content requirements and cash incentives for export  
125. Regarding local-content requirements, he indicated  that the local value addition was estimated 
on the basis of value and volume of local component  used in the production of goods, and determined 
by an Inter-Ministerial Committee.  As per a decision taken at the 2005 Hong Kong Ministerial 
Conference, Bangladesh might maintain trade-rela ted investment measures that deviated from the 
obligations of the TRIMs Agreement for an extended transition period, with a requirement that these 
would be phased out by 2020. 
126. The cash incentives for certain products were  provided only upon export performance with a 
view to diversifying the export base.  Exporters who did not enjoy the facilities of duty drawback and 
bonded warehouse were entitled to such incentives to  cover the costs of handling, processing, 
upgrading, and freight charges (domestic and intern ational transport) for agricultural products under 
Article 9.4 of the Agreement on Agriculture.  For industrial products these incentives were being 
provided on the understanding that they were not prohibited for Bangladesh as an LDC under the 
Agreement on Subsidies and Countervailing Duties. WT/TPR/M/168 
Page 24  
 
  Prohibition of re-export  
127. Export registration certificates were required for registration purpose only and the procedure 
for obtaining a certificate was very simple.  Re-export as such was not prohibited; the only 
requirement for re-export was to  have 5% value addition. 
Public procurement market and regulations  
128. Section 25 of the Public Procurement Act 2006, enacted on 6 July, 2006, provided for open 
international bidding to all persons regardless of nationality. International competitive bidding in 
government procurement was used where it reasona bly appeared that goods, works, and services, 
along with relevant experience and e xpertise were not available within the country.  There was no ban 
on participation of foreign bidders in national procurement proceedings provided that the international 
bidders accepted the national conditions and contexts.  
129. International competitive bidding in government procurement had been increasing over time.  
Apart from the CPTU's websites (containing te nders above threshold values of US$1.5 million 
(goods, works) or US$75,000 (services)), advertisem ents for international procurement opportunities 
were published in national daily En glish newspapers.  For wider inte rnational circulation, and to 
ensure international competitive bidding, these were  also published in UN publications and sent to 
Bangladesh missions abroad as well as to foreign missions located in Bangladesh. 
130. The settlement of public procurement disputes in Bangladesh was not new;  all standard 
tender documents (STDs) for international compe titive bidding included the mechanism for settlement 
of disputes.  In addition to international arbitr ation procedures, the Public Procurement Act 2006 
contained alternative provisions for resolution of di sputes, including submission of an appeal by the 
aggrieved party. 
131. The value of public procurement in Bangladesh  was around US$3 billion; the major share of 
which was handled by the public sector corporati ons and semi-autonomous bodies.  Apart from city 
corporations, municipalities, and other local govern ment institutions, there were about 213 public 
units that handled government proc urement operations.  All procurement proceedings were recorded 
and preserved for 10 to 20 years. 
132. The Implementation Monitoring and Evaluation Division (IMED) had the mandate to prepare 
an annual report to the Government with procur ement data, including the number and value of 
contracts awarded, the methods used and the produc t category for each method, and the nationality of 
the supplier/contractor/consultant.  A management information system (MIS) was being developed in 
the CPTU to capture this information.  The request ed information could be furnished after completion 
and launching of the MIS. 
Fiscal incentives to production and exports  
133. "Deemed" exporters meant suppliers of inputs so lely to the direct final exporters against 
payment in foreign exchange;  these exporters like direct exporters were not allowed to sell their 
products on the local market.   
134. With the divesture of many of the state-owned jute mills, the minimum export price system 
for raw jute was now virtually inoperative;  at pres ent, the banks only verified that the export price 
was internationally competitive.  With the assistan ce of the IMF, the Government had undertaken a 
study to quantify the amount of forgone revenue on a ccount of exemptions and rebates granted to the 
exporters.    WT/TPR/M/168 
 Page 25 
 
 
 
 Administrative pricing for certain goods and services  
135. An administrative pricing system for essential commodities and services covered a few drugs, 
petroleum products, and public utilities.  
IPR protection enforcement and WTO TRIPS compliance  
136. The Trade Mark Act 1940 preceded the TRIPS Agreement, it could not capture many of the 
contemporary issues covered, particularly the protection of geographical indications and the 
registration of service marks and collective marks.  A new trade mark law, which incorporated the 
provisions of the TRIPS Agreement, was awaiting th e approval of the parliament.  The Copyright Act 
2000 and the Copyright (Amendment) Act 2005 (being translated into English), which were both prepared by the Ministry of Cultural Affairs, incor porated the anti-piracy provision in the domains of 
computer software, motion pictures, pharma ceutical products, CDs/DVDs, and audio- and 
videocassettes.  The Ministry of Cultural Affairs had taken steps for wide circulation and proper 
dissemination of the Act along with its amendmen t in order to create awareness on copyright and 
related rights.  Bangladesh had not yet made any decision about joining WIPO  Internet treaties.  
Regarding the extended transition period to im plement the TRIPS Agreement, Bangladesh was 
examining the whole gamut of issues relating to IPR protection. 
137. Bangladesh intended to improve the IPR enforc ement further.  A case was initiated by the 
court on receipt of a written complaint from an  aggrieved party in case of wilful trademark 
counterfeit/copyright piracy on a commercial scale.  There was no pre-determined threshold to initiate 
a criminal action against persons making or selli ng counterfeit/pirated goods.  The court determined 
the type and extent of compensation, and could issu e orders for seizure and other temporary measures;  
decisions on infringed goods were taken by the co urt, and differed from case to case.  Criminal 
penalty was imposed by the appropriate Court of Law;  the Minister did not determine terms of 
imprisonment.  The Court was guided by the provisions  of the law in determining the amount of fine.  
In the context of Bangladesh, where per capita GDP was only US$445 and about 36% of the population lived below the poverty threshold of US$1 a day, a penalty of Tk 5,000 (US$81) seemed 
quite reasonable.  No separate data bank of the fin es imposed or collected was maintained; this was a 
painstaking and difficult task.   
138. Efforts were being made to collect data on seizure or confiscation;  these records/data were 
maintained manually by the customs authority in a register.  Other enforcement agencies like the BDR 
(Bangladesh Rifles), coast guards and police were also responsible for enforcement of copyright 
regulations within their respective jurisdictions.  Such information could be shared when available 
and upon request.  Since several agencies were involve d in enforcement of copyright, no consolidated 
information was available. 
139. The representative took note of the concerns regarding the existence of CD manufacturing 
units in Bangladesh and indicated that  the matter was under investigation.  
(iii) Sectoral policies 
Cash incentives for exports of agricultu re products and food security objectives  
140. Cash incentives were provided for some e xport products, including a few agricultural 
products.  These incentives were provided to encour age exports of high value agricultural products, 
which had virtually no impact on food security, and helped farmers to get better prices and raise their 
income.  WT/TPR/M/168 
Page 26  
 
  Natural gas export ban and sectoral regulation  
141. The gas market had experienced sustained dema nd growth in recent years.  An estimated 
US$8 billion investment was required to harness a nd develop a reserve to meet the demand up to 
2025.  Bangladesh lacked adequate reserves to export gas.  With the vision of maximizing the 
contribution of the gas sector in the development ag enda, the authorities were about to finalize a gas 
sector master plan, an energy policy and a Gas Act.  
Drug policy implementation measures  
 
142. The 1982 drug policy was based on the list of essential drugs adopted by the WHO.  
Domestically produced medicines were much cheaper than imported ones.  No specific government 
policies were required to meet the market share of domestically produced medicines.  Foreign 
medicines were imported and sold  domestically but demand was lim ited because they were more 
expensive than local products. 
Liberalization of trade in services and GATS commitments  
143. Concerning prospects for further undertaki ngs under GATS, although during the Hong Kong 
Ministerial Conference it was agreed that LD Cs would not be required to undertake new 
commitments in the services sector, the Government  of Bangladesh was taking reform measures on an 
autonomous basis. 
Issues and developments in the telecom sector  
144. Bangladesh was giving priority to basic telephone, Internet, VoIP and ICT services.  During 
the period under review teledensity had increased ten-fold and tariffs had decreased by 50%.  
145. Bangladesh had liberalized the telecom sector a nd a policy package had been put in place for 
increased foreign investment.  Under the new le gal and regulatory framework the procedures for 
issuing licences had been made easier.  Investment-f riendly tax policy had been introduced.  Public 
switched telephone network (PSTN) licences were issu ed on a first-come first-served basis through 
open tender.  PSTN licences had been given to 17 private companies and 6 mobile companies.  
Bangladesh would ensure operational and other ancilla ry facilities to them.  Mobile and other service 
licences were also issued through tender on the basis of market demand, with the objective of 
attaining at least 10% teledensity. 
146. Concerning existing GATS commitments, Bang ladesh needed to continue two MFN 
exemptions in international telecommunication ser vices.  Bangladesh would review the situation 
continuously with the objective of providing cost-effective services to the people. 
National shipping policy and flag-based discrimination  
147. The Shipping Policy 2000 had been adopted to attract the most efficient and effective 
shipping services for the country  as we ll as to liberalize and deregulate th e sector.  In this regard the 
Bangladesh Flag Vessels (Protection) Ordinance had already been amende d and would be further 
re-examined in line with the WTO principles.  
148. Bangladesh's state-owned shipping line, Banglad esh Shipping Corporation (BSC), maintained 
four or five vessels at Chittagong port in order to meet emergencies.  Chittagong Port Authority 
provided one priority berth to BSC-owned vessels, like many other countries.  Presently the first-come first-served principle was widely followed.   WT/TPR/M/168 
 Page 27 
 
 
 
 149. Regarding the Statutory Regulatory Order (SRO) requiring different bank guarantees for 
foreign-owned firms, the representative informed Me mbers that this had been issued in view of 
serious allegations made by shippers  of export products related to ha rassment in the delivery of goods, 
non-repatriation of the ex port proceeds, and wrong delivery.  The bulk of the businesses of freight 
forwarding was carried out by foreign companies that  did not have a permanent set-up in Bangladesh.  
In the absence of a regulatory framework, no action could be taken against the unscrupulous freight 
forwarders.  In order to remove the malpracti ces and to streamline the business process the authorities 
had issued the SRO in question.  
Tourism sector  
150. The contribution of the tourism sector to th e GDP of Bangladesh was only 0.02%.  Foreign 
exchange earnings from tourism in 2005 were US$70 m illion, 13.27% higher than the previous year.  
Analysis of available data revealed that more than 100,000 people were directly involved in the 
tourism industry and 200,000 were  dependent indirectly.  A study entitled "Bangladesh Tourism 
Vision 2020" stated that the contribution of tour ism to GDP would increase by 4% to 5% of GDP by 
2020. 
151. The discussant  noted Bangladesh's commitment to the MTS as a means of bolstering its 
economic development.  Evidence of this commitmen t was Bangladesh's significant contribution to 
the work of the WTO and the DDA through, inter alia,  its chairmanship of several groups, its 
leadership among LDCs, and its work for the enhancem ent of the IF.  Its preparatory process for this 
TPRB meeting, the high level delegation, and the ex tremely comprehensive replies to questions were 
additional signs of its commitment. 
152. In light of the quality of the authorities replies, it was hard to find additional questions;  he 
would make a few observations only.  The m acroeconomic environment was very positive and 
provided an opportunity to expand trade and economic growth if the right measures were taken.  As 
export diversification was among Bangladesh's central challenges, he would watch with interest the 
results of efforts in this area over the next few y ears.  Among Members there was a particular interest 
in the IF and Aid for Trade more broadly and how it applied to Bangladesh's situation, i.e. its 
technical assistance needs in specifi c areas.  He took note of Bangladesh's comments on the need to 
deliver on the IF funding commitment that had been  made.  He commended the sustained and visible 
anti-corruption efforts and added that in such matters  perceptions were often as important as realities.   
153. He hoped that other Members had taken careful  note of comments by Bangladesh and other 
participants on the issue of duty-free quota-free access;  he expected them to make their best efforts to 
deliver such access independently of the DDA nego tiations.  Trade and gender was an extremely 
important issue that, unlike Bangladesh, not all Members addressed in Trade Policy Reviews; he 
hoped that this would become a more routine matt er at TPRB meetings.  Concerning the answers to 
India's questions – considered as bilateral and to be delivered separately – he indicated that, as a 
matter of principle, any response to a question ra ised in this multilateral forum should be made 
available to all Members through the written reco rd of the Review;  thus, he encouraged the 
authorities to consider doing so. 
154. On trade policies, he referred to several comments on the absence of tariff bindings, a core 
issue at the WTO, and took note of Bangladesh's commitment to address the issue in the current 
negotiations, a logical priority for Bangladesh.  Re garding border charges and levies, he hoped that 
upon completion of the relevant review and the reduc tion of charges, this would not be a matter for 
discussion at the next (fourth) TPR of Bangladesh. WT/TPR/M/168 
Page 28  
 
  155. Concerning the streamlining and simplification of  the import and export regime, he noted that 
this was a considerable task and he remained in terested in the extent to which the TRTA and 
capacity-building support would help; the complex ity of the regime risked undermining Bangladeshi 
exports and to a certain extent nullifying the bene fits of growing  market access opportunities. 
156. On sectoral policies, he applauded the authoriti es' commitment to export diversification.  
Questions raised on the pharmaceuticals industry might benefit from some additional precision.  
Services appeared to be a dynamic element in the economy and this could be an important focus in 
export diversification, which could target not only software and ITC products but also other 
cross-border and computer-related services.  Bangl adesh and other LDCs could avoid being too 
heavily focused just on mode 4 remittances.  Con cerning local participation in overseas-bound cargo, 
bottlenecks were symbolic of the challenges face d by Bangladeshi exporters  and should be addressed 
in order to take full advantage of growing market access opportunities. 
157. The relatively strong macroeconomic envir onment provided a solid base to expand 
performance.  To take advantage of opportunities, fu rther structural reform was required, in pace with 
the positive macroeconomic environment.  The main  challenges ahead were the absence of tariff 
bindings, the complexity of fiscal incentives, the import and export charges/fees/processes, the slow 
pace of privatization, and the de pendency on textiles, complicated by the dismantling of the ATC. 
158. The Government was striving to address these ch allenges but the cost of complacency would 
be high, so continued efforts would have to be made .  He hoped that at the next TPR of Bangladesh he 
would see the results of even deeper structural reform. 
159. The representative of Djibouti
 expressed his appreciation for Bangladesh's development as 
well as its active participation in numerous WTO committees, including the LDCs group.  He assured 
the authorities of his delegation's support.  He und erlined the importance of the IF programme for 
LDCs and for their participation in WTO negotiations. 
160. The representative of the European Communities  took note of all plans for reform and review 
of different measures.  Continuous structural re form and strengthening of governance were essential 
to increase further juridical security and overa ll development in Bangladesh.  Product and market 
diversification was a long-run task for Bangl adesh;  in light of some good performance in 
pharmaceuticals, she hoped to see further progress in  other areas too.  Services activities were a 
dynamic and essential element for development;  furt her liberalization in sectors such as energy, 
transport, and telecommunications was essential to de velopment.  As power and energy were priority 
sectors for FDI, the EC encouraged the setting of a coherent energy policy to achieve this objective, 
together with tackling environmental concerns.  The TRTA remained a key priority for EC 
cooperation with Bangladesh;  the final report on co mprehensive trade needs assessment had already 
been sent to the Government of Bangladesh and the EC looked forward to discussing future TRTA 
projects. 
161. The representative of Tanzania  expressed his appreciation of Ba ngladesh's leadership and role 
in defending LDCs interests.  He sought repli es to comments by the discussant on the adequacy of 
TRTA available to Bangladesh and LDCs in genera l.  In the absence of the necessary TRTA support, 
it was often difficult for LDCs to undertake the necessary reforms and improvements.   
162. The representative of Canada  welcomed the authorities' comments on governance and assured 
them that Canada would be following the work of the National Anti-Corruption Commission 
carefully.  He appreciated the additional website references on public procurement opportunities, but 
among Canadian exporters there was a perception that  the operation of procurement regulations could 
be made more transparent.  In light of the impor tance of telecoms from the development perspective, 
he encouraged efforts to create a favourable at mosphere for local and foreign investors.   WT/TPR/M/168 
 Page 29 
 
 
 
 163. The representative of Bangladesh  stated that his Government would try to take action on 
several issues in response to comments made at th e TPRB meeting.  Border charges and levies were 
being examined and Bangladesh would respond to the WTO on a continuous basis.  Bangladesh's trade policy was not that complex;  its import and export performance reflected to a large extent the 
removal of complexities.  Bangladesh was followi ng the right direction, as proven by the case of 
pharmaceuticals where further measures would be taken.   
164. Regarding computer-related sectors, the author ities had formed advisory councils with the 
participation of the private sector:  there w as scope for improving performance in the sector.  
Regarding market access, he thanked the discussa nt for inviting Members to provide duty- and 
quota-free access.  Bangladesh had made signifi cant improvements in narrowing down gender 
discrimination, particularly in the garments sector. 
165. Bangladesh would try to resolve bilaterally th e issues raised by India but would keep the 
WTO posted on developments and discussions in this regard.  Bangladesh was making serious 
product diversification efforts, including close c ooperation with the EC through several bilateral 
projects involving, inter alia,  capacity building (human and institutional resources).   
166. It was heartening to hear good remarks on Bangladesh's fight against corruption, although 
cutting this to reasonable levels was a difficult task;  efforts, including the formation of the 
Anti-Corruption Commission, would give very positive  results in the near future.  Regarding fiscal 
complexities, Bangladesh tried to follow fiscal polic ies suitable to each sector.  Structural reforms  
would continue in various sectors to ensure sust ainable development.  His delegation took note of 
several suggestions for reform in services, energy , infrastructure, etc. and would respond later.  
Bangladesh was currently preparing an energy policy. 
167. The discussant
 responded to Tanzania's question by clarifying that this was the Review of 
Bangladesh (rather than of the discussant).  The question of funding was among the central weaknesses of the IF.  An effective diagnosis of the TRTA needs of LDCs would allow better 
mainstreaming of trade as part of their developm ent plans.  Consequently, the prominent ongoing 
programmes of donor countries and international institutions would respond to those needs with 
project funding.  The results of the programmes over the first 9-10 years had demonstrated that their success rate was not high enough.  Better efforts to make a bridge between the two processes were 
recommended by the Task Force, to which Bangladesh  had contributed significantly.  In his first 
statement he had accepted the challenge that th e recommendations to the IF had to deliver, inter alia,  
an increase in funding within the programme.  But st ill the IF would not be a full trade response even 
for LDCs;  it was the front-end of a process of build ing capacity to take advantage of trade.  The 
increase of the IF funding represented a significant ch allenge.  At present the IF stakeholders were 
moving on the implementation of the Task Force' s recommendations.  At the World Bank and IMF 
annual meeting, efforts were to be made to obtai n support from development and finance ministers so 
as to meet commitments for the funding increase.   WT/TPR/M/168 
Page 30  
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
168. The third Trade Policy Review of Bangladesh  has given us a much better understanding of 
Bangladesh's trade policies and practices together  with the challenges that it faces.  I thank 
Secretary Feroz Ahmed and his delegation as well as the discussant, Ambassador Stephenson of Canada, and Members of the TPRB for contributing to  our fruitful exchange of views.  Bangladesh's 
response to a large number of questions is also appreciated. 
169. Members commended Bangladesh's efforts to en sure steady growth of GDP through prudent 
macroeconomic policies and reforms in certain areas, despite endogenous and exogenous challenges.  
While noting efforts to improve governance, certai n Members encouraged Ba ngladesh to increase its 
capacity for revenue collection and move away fro m dependence on tariffs a nd other border charges 
as a main source of revenue.  Some Members considered that there is room for progress in 
implementing privatization plans.  Members congr atulated Bangladesh on its increased FDI inflows 
during the period under review and encouraged fu rther improvements in the foreign investment 
framework.  Members noted that Bangladesh's compre hensive poverty reduction strategy has led to an 
improvement of certain social indicators, including the share of people living below the poverty line.  
Trade and trade policy measures are an integral part of these efforts.   
170. In the light of Bangladesh's heavy dependen ce on exports of clothing and strong global 
competition in the sector, certain Members recomme nded efforts to diversify the export base and 
markets.  Bangladesh indicated that this is a pr iority and various facilities are being provided to 
exporters of non-traditional items.  
171. Members noted Bangladesh's deepening regi onal integration and other preferential 
arrangements in parallel with its efforts at the mu ltilateral sphere; Bangladesh indicated that these 
initiatives are to, inter alia,  expand its export market base.  They also commended Bangladesh's 
contribution to WTO work, including its leadership in the LDC group.  Several Members took note of Bangladesh's concerns over the decision at the Hong Kong Ministerial Conference on duty-free 
quota-free market access for LDCs, in particular w ith respect to textiles and clothing.  Certain 
Members enquired on the adequacy of and furthe r needs for trade-related technical assistance 
available to Bangladesh during the period under review. 
172. Members commended Bangladesh's trade liberalization efforts, aimed at raising export 
competitiveness.  Despite recognizing progress in simp lifying the tariff structure and lowering applied 
ad valorem  rates, Members encouraged Bangladesh to e xpand the scope of its bindings concerning 
non-agricultural tariff lines and to narrow the wide gap between bound and applied tariff rates.  
Several Members requested information on the state of revision of other border charges in line with 
WTO commitments.  Action in these areas shoul d improve market access predictability and 
transparency. 
173. Some Members commended and encouraged furthe r legal and regulatory reforms to ensure 
gradual implementation of WTO obligations, particular ly in the area of intellectual property rights.  
This should contribute to attracting more foreign investment and increasing Bangladesh's integration 
into the rules-based MTS.  
174. There was also discussion in particular about the risks posed to the Bangladeshi economy by 
the expiry of the Agreement on Textiles and Cl othing and about adjustment measures taken by 
Bangladesh in this respect;  Bangladesh's non-endorse ment of regional cumulation in the EC rules of 
origin for intermediate inputs fro m neighbouring countries in order to obtain a higher utilization of the 
EC-GSP scheme, including those for production of garments; and about policy measures concerning 
pharmaceuticals.  In light of the importance of the services sector to the economy and its future  WT/TPR/M/168 
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 development prospects, several Members urged Bang ladesh to pursue progressive liberalization in 
this sector and to expand its GATS commitments. 
175. This Review has been very useful in giving us  all an overview of Bangladesh's trade policies 
and practices and the challenges it faces.  I would once again like to thank the Bangladeshi delegation 
for their efforts, the discussant fo r his insightful comments, and Members for contributing to what has 
been a very enlightening two days of discussions .  We look forward to receiving the remaining 
outstanding responses within the next month. 
 
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