Businesses for deferred implementation

Businesses have sought more time for the rationalisation of Bangladesh's maiden tariff policy, reasoning that many industries still need more state protection to be ready to compete with their international peers. 

The commerce ministry published a gazette on the National Tariff Policy on August 10, to stay in tune with Bangladesh's United Nations country status graduation from a least developed to a developing country in 2026.

It also seeks to improve the competitiveness of local companies in international markets and counter loss of preferential trade benefits after the graduation.

Local trade and economic activities are suffering the severe fallouts of the pandemic and Russia-Ukraine war, said business leaders.

Businesses are yet to regain their financial health, especially the cottage, micro, small and medium enterprises, which are facing more challenges as they do not have the strong financial capacity to cope up with the challenging times, they said.

Since Bangladesh will enjoy preferential trade benefits to the European Union until 2029, the government should not implement the new tariff policy, they said.

It should rather continue protecting and supporting further growth of the local industries and conglomerates, said the business leaders.

Moreover, Bangladesh has started availing benefits of global geopolitical tension as international businesses have started relocating to different locations from, for instance, China.

Bangladesh has been receiving business, especially garment work orders, from international clothing retailers and brands opting for alternatives to China, they said.

It is good that the tariff policy will be liberalised for the graduation, said Md Saiful Islam, president of the Metropolitan Chamber of Commerce and Industry.

But it will be better if it happens after 2029 so the local industries can have more time to take preparations, he said.

The objective of the national tariff policy is to make the local industries competitive in context to international standards, said Mohammad Ali Khokon, president of Bangladesh Textile Mills Association.

However, some issues relating to local industries like bank interest rate, ease of doing business, cost of doing business, price of raw materials and productivity efficiency should also be ungraded to that of international standards first, he said.

However, the tariff can be immediately liberalised for industries which are dependent on imports, he said.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, welcomed the policy, saying he expects it to bring ease to doing business.

Md Ali Zaman, president of the SME Owners Association of Bangladesh, wanted the government to implement the policy in a way such that it gives more protection to cottage, micro, small and medium enterprises so that they could grow.

Md Amin Helaly, senior vice-president of the Federation of Bangladesh Chambers of Commerce and Industry, also welcomed the tariff policy. He also demanded long-term protection of the cottage, micro small and medium enterprises.

Such a policy is needed due to the upcoming graduation and protecting the future of industries, he added.

Senior Commerce Secretary Tapan Kanti Ghosh earlier said in a high tariff regime, countries may not be interested to ink free trade deals with Bangladesh.

"Tariff rationalisation will indicate that the country is maintaining the standards set by World Trade Organization," he said.

Tariff rationalisation, however, does not mean that all tariffs will be made zero, he added.