Bangladesh’s graduation from Least Developed Country (LDC) status by 2026 is a cause for celebration.
Yet, beneath the confetti lurks a hidden threat – billions in lost exports due to eroded trade preferences.
The government’s proposed duty reductions on 282 products are a welcome first step, but they resemble a Band-Aid on a gaping wound.
The real issue lies with Bangladesh’s sky-high customs duties compared to the global average.
This discourages major trading partners from signing the free-trade agreements (FTAs) that are critical for maintaining duty benefits post-graduation.
Bangladesh’s average customs duty is more than 28 percent, while the global average customs tariff hovers around 7.5 percent. India’s average is 14 percent, the USA’s 2.5 percent and EU’s 4 percent. Negotiations with Japan, for instance, demand a staggering 90% duty cut on a massive list of products – a far cry from the current, timid approach.
Time is of the essence. With graduation looming, Bangladesh boasts only a single preferential trade agreement – a meager achievement considering the robust network needed.
The outdated practice of setting minimum import prices, incompatible with WTO rules, adds another layer of complexity.
The government’s plan to phase it out is a step in the right direction, but the pace is glacial. We need a sprinting marathon, not a leisurely stroll.
A glimmer of hope emerges from a senior customs official who acknowledges the limitations of the current measures.
The government’s challenge is a delicate balancing act: generating revenue, protecting local industries, and fostering export competitiveness.
However, the current efforts resemble a half-hearted attempt at juggling. Bangladesh desperately needs a dedicated task force, significant resource allocation, and a more aggressive approach to bridge the gap.
Only then can Bangladeshi businesses navigate the choppy waters of the global market with confidence.
Let’s transform this graduation from a potential pitfall into a springboard for a truly competitive Bangladesh on the world stage.