WORLD TRADE
ORGANIZATIONWT/TPR/M/68
14 June 2000
(00-2351)
Trade Policy Review Body
2 and 4 May 2000
TRADE POLICY REVIEW
BANGLADESH
Minutes of Meeting
Chairperson:  H.E. Mr. Kåre Bryn (Norway)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3II. OPENING STATEMENT BY THE REPRESENTATIVE OF BANGLADESH 4
III. STATEMENT BY THE DISCUSSANT 7
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 11V. REPLIES FROM THE REPRESENTATIVE OF BANGLADESH AND
ADDITIONAL COMMENTS 15
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 21
ANNEX ADVANCE WRITTEN QUESTIONS AND RESPONSES BY THE
DELEGATION OF BANGLADESH 23WT/TPR/M/68
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Bangladesh was held on 2 and 4 May 2000.  The
Chairperson, H.E. Mr. Kåre Bryn (Norway), welcom ed Mr. Ghulam Rahman, Secretary, Ministry of
Commerce, as head of the Bangladesh delegati on, H.E. Dr. Iftekhar Ahmed Chowdhury, and the
delegation from Dhaka and from the Bangladesh Mission in Geneva.  He also introduced the
discussant, H.E. Mr. Johan Molander (Sweden) and reminded Members that the discussant would
speak in his personal capacity and not as a representative of his Government.  In accordance with theestablished procedure, the discussant had made available in advance, an outline of the main issues he
intended to raise.  These were contained in document WT/TPR/D/48.
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The report by the Government of Bangladesh was contained in
document WT/TPR/G/68, and that of the WTO Secr etariat in document WT/TPR/S/68.  Copies of
advance written questions submitted by 
Hong Kong, China;  Thailand;   New Zealand;  Canada;
Japan;  Australia;  the European Union; the Un ited States;  India;  and the Republic of Korea
had been transmitted to the delegation of Bangladesh.  Replies to these and other questions raised
during the meeting are reproduced in the Annex.WT/TPR/M/68
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF BANGLADESH
3. The representative of Bangladesh stated that his Government highly valued its membership at
the WTO and considered the TPR as an important exercise.  He said that as appropriate
documentation had already been circulated among Members, he would cover only a few salient
features of Bangladesh's recent economic efforts, which he hoped would be helpful in later
discussions.
4. Bangladesh had seriously initiated economic liberalization since the mid-1980s, in tune with
the changes in the global economic trends.  This had been further boosted by joining the WTO in
1995 as a founding Member.  Since then Bangladesh had been pursuing comprehensive reforms in the
trade and foreign exchange regimes, financial sector, fiscal and monetary areas, and relevant
legislative/regulatory framework.  New industrial investments were no longer made in the public
sector and a privatization programme involving sale of marketable units of public sector enterpriseswas being implemented.  A number of loss-making SOEs had already been closed.  Some
administered prices had been dropped and a shift in emphasis from indirect to direct taxes had been
effected to broaden the revenue base as well as to reduce high tariffs.
5. In the new liberalized regime, export diversification and import opening had received
fast-track attention.  Tariff level and dispersion had been reduced, QRs had been dismantled, and thepositive list of "importables" had been replaced by a smaller list of "unimportables", thereby opening
the trade regime to the free play of market forces.  By the mid-1980s, about two thirds of the HS
eight-digit items had become eligible for free entr y into the Bangladeshi market.  In the 1990s, the
multiple sales tax rate was replaced by a simple 15% value-added tax.  By 1994, the list of freely
importable items had risen to 94% of the HS eight-digit lines;  only 0.4% of the list remaining was
banned for religious, cultural, and security reasons.  Items not included in the two lists had been
allowed to be imported under strict regulatory supervision.  Parallel to the liberalization of theexport/import trade, the normal protection rate had been cut drastically for domestic manufactures, as
indicated in Tables 1 and 2 of the Report by the Government (WT/TPR/G/68).  The highest import
tariff rate had been brought down from 350% in FY91 to 40% in FY99.  This maximum rate had
further been reduced to 37.5% in the current FY00 budget, thereby bringing the average tariff rate
down to 20.1%.  Quantitative restrictions had also been eliminated gradually over the 1990-2002period, as demonstrated in Table 3 of the Government Report.
6. Liberalization in Bangladesh had happened at a faster rate than in many other comparable and
even stronger economies, and he believed that it had been good for the country on balance.  Its
exports had successfully entered the highly competitive northern markets, and its products had
continuously improved in quality and diversity.  However, there was a downside to this development:many SOEs as well as infant, private, small and medium enterprises had fallen victim to cheap
imports from mature economics.  While consumers had benefited immediately in terms of lower
prices and wider choices, there had been a rise in unemployment with painful social consequences in
the short-run.  At the same time, revenue loss had adversely affected the small public sector's safety
net.
7. In spite of the present powerful export drive, Bangladesh's narrow export base, with
dependency on one or two items, incited great concern.  In particular, the forthcoming elimination of
the shelters of the Agreement on Textiles Clothing (ATC) by end of 2004 could hit exports hard by
disrupting Bangladesh's preferential access to the advanced markets.  In order to remain competitive,
the private sector, with support from the Government, had been taking steps to improve productivity,diversify its export products, encourage necessary linkage industries and achieve brand
differentiation.  A sympathetic and helpful international trading arrangement in the WTO would be
essential for Bangladesh to go through this uncertain new phase in global trade.  As an LDC with theWT/TPR/M/68
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prospect of leap-frogging into the upper-end of the global market in the foreseeable future,
Bangladesh would depend heavily on a supportive global environment.  Bangladesh considereddomestic trade-related infrastructure important to complement international assistance in this regard,
and efforts were currently under-way to implement a long-term customs and tax modernizing
programme and to strengthen the Bangladesh Tariff  Commission.  He sought appropriate technical
assistance from developed trading partners and IGOs, particularly through the Integrated Framework.
Bangladesh had already submitted a list of some 34 high priority projects under the Framework.
8. Market access remained the principle bottleneck in Bangladesh's export drive.  Together with
other LDCs, Bangladesh had been pleading for meaningful duty- and quota-free market access into
developed countries as well as upper-income developing countries.  In this context, Bangladesh's
access to the regional markets was absolutely essential in its export development drive.  In Seattle and
at UNCTAD-X in Bangkok, the LDCs' demands for market access had received widespread support,
and therefore LDCs were waiting for immediate and meaningful implementation of assurances and
commitments in this regard.
9. Trade opening had contributed to stability in Bangladesh's macroeconomic environment.
GDP growth rate had accelerated to about 5% per annum during FY91-98.  However, FY99 had been
a rather poor year for Bangladesh, as in 1998 the devastating flood had damaged the already fragileinfrastructure and thin capital stock of the economy.  Millions of flood-stricken people had had to be
assisted through one complete crop cycle in order to enter the production chain again.  Despite the
high flood loss, it was expected that GDP grow th rate would exceed 5.5% in FY00.  Another
significant shift had been a change in the relative importance of agriculture and manufacturing in the
economy:  while the share of agriculture in GDP had been reduced from 30% in the early 1990s to
25% in the late 1990s, that of manufacturing had increased from 12-13% to 15-16% during the same
period.  These changes indicated that while the vital agriculture sector had grown on a sustainedabsolute basis, its relative share in the GDP had declined.
10. The budget deficit had increased to 5.3% of GDP in FY99 from 4.2% in the previous year.
An expansionary monetary policy had been pursued in early FY99 to meet the cost of the flood
rehabilitation programme, increasing the money supply (M2) by 12% and therefore inflationary
pressure on the economy.  However, the Govern ment's prudent macroeconomic management had
reduced inflation from its peak of 12.7% in December 1998 to 7.5% in April 1999, and it had
continued to decline.  The current FY00 budget emphasized mobilization of domestic resources,
promotion of export-led growth, as well as pov erty alleviation, which was the key objective of
Bangladesh's development strategy.  However, success in poverty alleviation had to depend on
reforms, macroeconomic environment and strong growth.  Bangladesh had introduced reforms in thetaxation system with the aim of increasing revenue collection and improving efficiency in tax
administration.  New laws and special courts had been established to deal with loan defaulters,
thereby restoring confidence in the banking sector.  The telecommunications and energy sectors,
domestic aviation and railways had been opened to private investment.  The Government was also
committed to the exploitation of the promising gas sector, keeping the interest of the nationaleconomy uppermost in its commercial strategy.
11. Though Bangladesh was not a signatory to the WTO Information Technology (IT)
Agreement, it had taken steps to liberalize its nascent IT trade;  import of basic IT equipment was free
of customs duty and VAT, and the acquisition and distribution of V-SAT services had been
deregulated.  This had boosted computer use by the younger population.  Bangladesh hoped to gainfrom the output of this fast-growing sector in the near future.
12. Bangladesh had been facing some difficulties in the implementation of WTO Agreements,
partly due to lack of human resources, low technology stock, and weak institutions in the country.WT/TPR/M/68
Page 6
Some of the difficulties had been described in the Government Report.  Bangladesh was conscious
that these difficulties had delayed the reform process and had increased the cost of doing business inthe country.  In order to overcome these difficulties and improve the level of implementation,
Bangladesh hoped to receive enhanced technical assistance and capacity building support from WTO
and other donors.  The IDA had funded the Banglade sh Export Diversification Project, which was
aimed at addressing some of the capacity-related weaknesses in the supply side of the economy;
however, much more was needed in this area.  In conclusion, he thanked Bangladesh's developmentpartners for assistance, which they had extended since its independence in 1971.WT/TPR/M/68
Page 7
III. STATEMENT BY THE DISCUSSANT
13. The discussant expressed his pleasure at having been entrusted as a discussant and with
setting the tone for the meeting of the second Trade Policy Review of Bangladesh, which was one of
the major actors in the WTO and a leading voice among the LDCs.  He intended to touch upon eight
themes.
Growth
14. Despite many endemic problems, such as high population density and devastating floods,
Bangladesh had made much progress since independence in many areas including education, health,
and macroeconomic environment.  One very notable achievement was real GDP growth rate,
averaging above 5% in 1992-98.  However, the economy was far from reaching its real potential;  the
real GDP growth was not sufficient to make much dent in its problem of poverty.  GDP per capita in
1998/99 had been among the lowest in the world at US$345, and more than one third of its populationof 127 million still lived below the poverty line.  A growth rate exceeding 7% was needed to
significantly reduce poverty and this point had been echoed at the recently held World Bank
Development Forum for Bangladesh.  While the Forum had praised Bangladesh's achievements since
independence in improving social indicators, food self-sufficiency and its civil society, the
Government had been urged to implement critical policy and institutional reforms conducive to ahealthy economy and sustained well-being of its people.
15. Supported by strong growth in the agricultural sector, the Bangladesh economy had expanded
after the devastating floods of 1998, however, it remained vulnerable;  a mounting fiscal deficit and a
widening trade gap was undermining the present macroeconomic stability.  Recovery remained weak
in non-agricultural sectors with a slowdown in indust rial output growth, at 3.8%.  The slow progress
in financial reform and other reform measures were also significant obstacles.  He asked the
Bangladesh delegation what measures they had taken to formulate a medium and long-term growthstrategy for sustainable economic development.
Trade policy
16. Bangladesh had been active in supporting and strengthening the multilateral trading system,
and its leading role among least developed countries in the WTO, addressing their specific needs and
concerns, was well appreciated.  Like many ot her LDCs, Bangladesh experienced problems of
implementing WTO commitments, in particular, concerning notifications, partly due to lack of
know-how and institutional capacity.  He suggested that technical assistance through the Integrated
Framework could be provided to Bangladesh in this regard.
17. He praised Bangladesh's trade liberalization during the 1990s, and particularly its fast pace of
liberalization.  Liberalization in the trade regime included, inter alia, reduction of average applied
tariffs by more than half in 1992/93-1999/00, and elimination of many quantitative restrictions on
imports.  However, with applied tariff rates still high and varying widely, the customs tariff
constituted a potentially important distortion to competition and therefore an obstacle to the efficient
allocation of domestic resources.  In addition, with less than 15% of the tariffs bound, Bangladesh
retained a great deal of freedom to raise its rates unilaterally.  The requirement of a number oflicences, approvals, permits, etc. for exports and im ports further increased the complexity of the trade
regime.  He asked what measures the Government was taking in addressing this problem.
18. Bangladesh received relatively insignificant amounts of foreign direct investment, with
annual net inflows of some US$200-300 million in FY99 and FY00.  Most such investment had been
directed towards the power sector since the discovery of huge reserves of natural gas in the earlyWT/TPR/M/68
Page 8
1990s.  While FDI could help transfer technology, capital and skills, and could improve the
productivity and competitiveness of the economy, if used wisely, there were also risks.  Bangladesh'sforeign exchange payment obligation for power-sharin g contracts, which had been signed between the
Government and foreign companies to extract natural gas, was estimated by the World Bank at
US$500 million per annum during the period 2000-05 and US$1 billion per annum for the subsequent
five years.  He noted that Bangladesh would need an annual export growth of 8-10% in order to meet
its payment obligation without drawing from its alr eady low reserves at approximately US$1.5 billion
or 2.2 months of imports.  While export of natural gas was considered to be one solution, it would
require major political and economic decisions on how to balance the domestic needs of the present
generation with those of the future.  He sought the Government's view on the future management of
natural gas reserves, including the possibility of exporting gas.
Export base
19. The discussant noted that with ready-made garments dominating its exports (75%) and the
bulk of those exports going to the European Union and the United States, there was a need for
Bangladesh to diversify both its export base and export markets.  In particular, with the integration of
textile and clothing sector in to the GATT fr amework under the Agreement on Textiles and Clothing
(ATC), Bangladesh's ready-made garment exporters needed to increase efficiency and improveproduct quality, in order to face competition on equal terms with countries like India.  As the garment
industry depended heavily on imported textiles, due to insufficient capacity of local spinning mills,
Bangladesh was left with the least value-adding chai n of the industry.  The fact that price increases
contributed to only 6% of the total value increase of exports in FY00 down from more than 40% in
FY97 and 24% in FY98, indicated Bangladesh' continuous failure to move up the value-added chain.
He was interested to know what actions the Government was taking to broaden the export base and
enhance a more value-added export production.
Structural reforms
20. Since the early 1990s, Bangladesh had been carrying out structural reforms aimed at
liberalizing foreign trade and exchange rate regimes,  restructuring the industrial sector, strengthening
fiscal and monetary management, and encouraging pr ivate sector investment.  Nevertheless, the pace
of reform was slow, notably in the tax and customs administration, banking, privatization ofstate-owned enterprises (SOE), governance, and compliance with core labour standards.  He asked
what measures the Government was taking to speed up structural reforms.
21. More than 2 million people were entering the workforce every year, thus there was a need to
diversify the Bangladesh economy and accelerate job creation outside the agricultural sector, which
accounted for 30% of GDP and employed 63% of the total labour force.  However, industrial outputas part of GDP appeared to be decreasing, and public investment in infrastructure and social services
had been insufficient.  He expressed his concern that the process of reform appeared to have lost
momentum and asked what action the Government planned to take in order to create jobs outside the
agricultural sector.
The financial sector
22. Access to credit was one of the key constraints in doing business in Bangladesh.  Even though
the banking system had excess liquidity, high government borrowing pushed lending rates upwards
and therefore borrowing rates were detrimentally high for the private sector.  In general, the financial
sector was underdeveloped in Bangladesh;  insider lending and a deficient legal framework had paved
the way for a "default culture", and the ratio of non-performing loans was unsustainably high ataround 40%.  He therefore asked how the Government was proceeding with financial sector reform inWT/TPR/M/68
Page 9
areas such as legal framework, autonomy of the central Bank, loans to loss-making SOEs,
transparency in transactions, and enforcement of the newly enacted bankruptcy and debt recoverylaws.
Infrastructural services
23. While the foreign investment regime was liberal, with no limitation on foreign equity
participation or repatriation of profits, lack of investment in essential infrastructure had clearly
hampered Bangladesh's economic development.  In particular, unreliable telephone connections,insufficient energy supplies, poor transportation and port services disrupted production and
international trade and discouraged foreign investment in Bangladesh.  He wondered how the
Government was planning to improve infrastructure services.
The fiscal position
24. Bangladesh's fiscal position had been characterized by a weak revenue base and an increase in
expenditures;  annual government expenditure had averaged around 14% of GDP during the review
period whereas tax revenues had averaged 7.5%, which was very low by international standards.  The
fiscal position had recently deteriorated due to increased expenditures in the wake of the floods of
1998, with the deficit expected to increase from 4.8% of GDP in FY99 to 6.3% of GDP in FY00.  As
a result, a persistent central government deficit had been financed by heavy borrowing from theprivate sector, reaching almost Tk 45 billion during the first nine months of FY99, against a target of
Tk 15 billion for the full fiscal year.  He warned that the fiscal imbalance could undermine
macroeconomic stability in the short term and could also jeopardize the Government's ability to
undertake essential social expenditures and to provide reliable basic infrastructure in the long term.
He sought details of the measures the Government was taking to improve the fiscal situation.
25. Citing the Secretariat report, he noted that the main obstacles for economic development in
Bangladesh were home-grown:  unreliable utility supply, traffic and port congestion, pollution, etc.
However, it had been estimated that over 50% of the Government's budget was allocated to salaries or
interest payments, leaving insufficient amounts for investment, social services, and education.  He
was interested to know what measures the Government was taking to raise the quality of public
spending.
Governance
26. Politics in Bangladesh, which provided for more confrontation than dialogue and often
resulted in strikes, had hampered not only foreig n but also domestic investment.  With the two major
parties seldom consulting each other on major issues or negotiating solutions, the basis for lasting
decisions was weak, and with a somewhat dysfunct ional parliament, the Government was not subject
to regular scrutiny.  As a result, accountability and transparency were weak in Bangladesh and somepowerful lobbying groups were able to influence domestic politics.  Lack of transparency provided
much scope for administrative discretion and corruption and resulted in high cost of doing business in
Bangladesh.  The World Bank Bangladesh Development Forum had also emphasized the importance
of improving governance, especially improving transparency and accountability and reducing
corruption.  Thus, measures to combat corruption, as well as to create independent institutions, wereurgently needed.  He asked what measures the Government was taking to improve political
accountability and administrative competence, and to create independent and open institutions, free
from vested interests.  He also sought the Government's view on the usefulness of WTO rules in
fighting corruption.WT/TPR/M/68
Page 10
27. In conclusion, Bangladesh was a poor country, struggling with typical problems of
underdevelopment:  it had a short modern history, born out of its dramatic struggle for independence,facing numerous social problems as well as recurring natural disasters.  It was also situated in a region
of intense political rivalry as well as ethnic and religious tensions.  Nevertheless, in spite of the
short-comings of its turbulent political system, Bangladesh had made remarkable strides ahead.  He
was convinced that through further trade liberalization and continued structural reform, combined
with increased technical assistance through the WTO and the Integrated Framework, Bangladeshwould be able to benefit further from the multilateral trading system.WT/TPR/M/68
Page 11
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
28. Members commended Bangladesh for its active and constructive role in the multilateral
trading system, particularly as a leader of the least developed countries addressing their particular
needs and concerns.  Acknowledging the immense difficulties facing Bangladesh, which remained
one of the poorest countries in the world, Members praised the country's response to the devastating
floods of 1998 and its substantial efforts to reduce poverty.  They welcomed trade liberalization
measures taken by Bangladesh since the last TPR, including simplification and rationalization of thetariff structure, reduction of tariff rates as well as the number of tariff bands, and removal of some
quantitative restrictions.  Its liberal investment regime, as well as the recent opening-up of
state-dominated sectors (telecommunications, power generation and transportation) were also
acknowledged.
29. Members encouraged Bangladesh to deepen its reforms in the following areas:  broadening of
the tax base;  banking reform to address non-performing loans and other problems;  privatization of
state-owned enterprises;  further simplification of the tariff regime;  and reform in customs
administration.  Members were concerned that the lack of transparency and uneven application of
rules and regulations in the trade regime, as well as the infrastructural bottlenecks, contributed to an
uncertain business climate and thus increased the cost of doing business in Bangladesh.  Therefore,they encouraged Bangladesh to increase its bi ndings and to bring down the gap between the bound
and applied tariff rates.  At the same time, it was urged to make use of the GATS framework for its
future liberalization in services, which would complement Bangladesh's investment objectives.
30. Members recognized Bangladesh's difficulties in implementing WTO Agreements due to lack
of human resources and technical capacities, and called for the provision of more technical assistance,
particularly, through the Integrated Framework.  Bangladesh was also urged to take measures to
diversify its narrow export base.
31. The representative of Hong Kong, China stated that it had been Bangladesh's sixth largest
trading partner in 1998 while Bangladesh had been its fortieth largest partner in 1999.  The fact that
Hong Kong, China was not a huge economy but completely open and that it had become Bangladesh's
sixth largest trading partner, would indicate tangible benefits of effective market access.  He reiterated
the importance of granting duty-free and quota-free market access to all products from leastdeveloped countries.
32. While technical assistance alone would not provide the answer to all problems Bangladesh
was facing, he was supportive of a more predicta ble funding of WTO-related technical assistance
through the WTO's regular budget.  The TPR exercise could constitute useful technical assistance for
Bangladesh, and he hoped that the problems identified would receive full and proper attention andthat appropriate action would be taken wherever feasible.  He expressed appreciation for the close
collaboration between the two countries in the policy area affecting trade in textiles and clothing;
they were partners through their common membership of the International Textiles and Clothing
Bureau, which had done much work recently on implementation of the WTO Agreement on Textiles
and Clothing.
33. The representative of Australia stated that the newly introduced compulsory preshipment
inspection system, which assessed import duties on a certified invoice value rather than on fixed tariff
values, would allow quicker release of goods from ports.  In the long term, he hoped that
improvements in customs administration would remove PSI, enhance collection of tariff revenues,
and facilitate customs clearance, with consequent benefits both to exporters and domestic industry.WT/TPR/M/68
Page 12
34. He welcomed Bangladesh's recent admission as a full member to the Indian Ocean Rim
Association for Regional Co-operation whose main work was trade facilitation, and he lookedforward to working closely on a compendium of customs, compiling quarantine and investment
regulations as well as harmonization of measurement standards and accreditation.  Moreover, he
urged Bangladesh to ensure that its regional arrangements did not interfere with or diminish the value
and role of the multilateral trading system.
35. The representative of India stated that the scope of the TPR should be confined to trade policy
matters, and not to issues such as good governance, corruption or labour standards.  He hoped that
Bangladesh's emphasis on mobilization of domestic resources, increasing the tax base, and greater
transparency in the trade regime, would help the country to realize the full benefits of the economic
reform it had undertaken.  In particular, he praised the country's innovative rural credit schemes and
programmes for empowering women as a way to address poverty.  Moreover, the organizationsinvolved in the Integrated Framework would also he lp in addressing the constraints Bangladesh was
facing in institutional and technical capacity.
36. The success of Bangladesh's ready-made garments exports under the preferential access to the
U.S. and EU markets provided a specific example that greater integration of developing countries in
the global trade could be achieved through initiatives aimed at products of comparative exportadvantage of these countries.  India had offered Bangladesh quota-free access to its markets since
1 August 1998, and preferential access, under SAPTA,  of 50% or more on 2,014 HS six-digit tariff
lines covering 72% of Bangladesh exports to India.  The two countries had concluded a bilateral
agreement for the avoidance of double taxation, and they were currently negotiating a bilateral
investment treaty for promotion and protection of investment, as well as an agreement on mutual
recognition of quality, standardization, and testing under the TBT Agreement.
37. He noted that Bangladesh's experience in running a parallel system of tariff values and
voluntary preshipment inspection would be of value to other WTO Members.  He requested
clarification whether Bangladesh had started applyi ng the Customs Valuation Agreement at the end of
its transition period in January 2000, and how it intended to deal with the problems of
under-invoicing.
38. The representative of Canada hoped that the rece nt opening of an office by a Canadian Bank
for the first time in Bangladesh would further stimulate trade and economic activities between the two
countries.  Referring to the significant contribution of services to the Bangladeshi economy, she
reiterated the importance and benefits for all nations of active involvement in the WTO negotiations
on services.  Moreover, she noted that the Canadian International Development Agency had provided
funding for a project led by the Canada-based Centre for Trade Policy and Law and the BangladeshCentre for Policy Development, with the aim of  further strengthening Bangladesh's capacity to
participate in, and to meet its commitment to, the WTO.
39. The representative of Japan stated that his country was the largest donor country to
Bangladesh and that the two countries had good trade relations reaching around US$450 million in
1997.  The two countries had concluded an agreement for promoting and protecting investment inAugust 1999.  However, he noted that investment environment in Bangladesh needed to be improved
for increased investment from Japan.  The time-consuming procedures by the Loan Scrutinizing
Committee of the Bangladesh Bank and the slow i ssuance of letters of credit by the Bank were
specific concerns.
40. Japan's main concern was the lack of transparency in Bangladesh's tariff regime and its
customs procedures.  Therefore, he urged Bangladesh to improve its binding ratio, reduce the gap
between the applied and bound rates, streamline customs procedures by implementing Article VIII ofWT/TPR/M/68
Page 13
the GATT and the Import Licensing Agreement, a nd diminish the discretion applied by customs
officers when determining the applied tariff rates.
41. The representative of the European Union stated  that the EU was Bangladesh's largest trading
partner, absorbing nearly 45% of Bangladesh's exports or € 1.95 billion in 1998. Bangladesh's trade
surplus with the EU, exceeding € 1 billion annually, could be attributed to the EU's open trade policy
towards developing countries.  Bangladesh had enjoyed since 1971 a suspension of import duties on
industrial products covered by the GSP scheme.  Under the present GSP scheme, which extended to
31 December 2001, Bangladesh's textile and clothing sector had particularly benefited from a
softening of the rules of origin since January 1999, and the cumulation of the rules of origin for
SAARC members since February 2000.  Moreover, the new Co-operation Agreement between the EU
and Bangladesh, due to be signed on 22 May 2000, could foster the bilateral relationship in areas of
development aid and economic cooperation, with special emphasis on human rights, democraticprinciples, and core labour standards.
42. The representative of the Republic of Korea addressed specific concerns by some Korean
investors in Bangladesh.  Regarding arbitration, he said that despite Bangladesh being a party to the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, signed in August 1992,
a local company was allowed to sue a foreign party in a local court even after an arbitration between
the two parties, and it seemingly annulled the result of this arbitration, which had presumably been
deemed unfavourable to the local company.  He hoped that Bangladesh would duly honour the
outcome of an arbitration and refrain from allowing unnecessary lawsuits for matters already settled
by arbitrations.
43. Korea's other concern included delays in the issuance of letters of credit by Bangladeshi
banks, which often took more than 30 days, compared with one week by international practice, thus
constituting a trade barrier.  He noted that procedural complexities, including burdensomedocumentation, in customs clearance was another considerable impediment to trade.  He wondered
whether the Bangladeshi government had taken steps so as to lower the costs of imports and facilitate
trade.  Finally, he sought some examples of "rules of origin criteria and procedural complexities that
made it difficult for Bangladesh to derive benefits under GSP schemes" referred to in the Secretariat
Report and sought some suggestion as to how to remedy these problems.
44. The representative of Pakistan welcomed the steps taken by Bangladesh to pursue economic
reform since the mid-1980s, including, inter alia , liberalization of the trade and foreign investment
regimes, strengthening of the financial sector as well as of legislative and regulatory framework,
restructuring of loss-making state-owned enterprise s, adjustment or abolition of some administered
prices, and broadening of the base of VAT collection.  These efforts had resulted in the acceleratedgrowth of GDP per capita, to 3.2% per annum during 1991-98 compared with 1.7% during 1984-90.
He hope that Bangladesh's difficulties in implementing WTO Agreements could be addressed by
WTO Members.  He reiterated that issues such as good governance, corruption and labour standards
were beyond the scope of TPR.
45. The representative of Norway noted that Bangladesh had become less dependent on
development assistance;  the ratio to GDP had been reduced to 4% from 8% over the past ten years.
Bangladesh had also achieved near self-sufficiency in food production.  She also pointed out that the
share of the development budget directed to social purposes had increased from 11% in 1990 to
22.3% in 2000.  A fundamental challenge for Bangladesh was to improve governance and institutions
by strengthening law and order, reforming the banking sector, and enhancing customs and taxadministration.  Infrastructure deficiencies also needed to be addressed, particularly in the
telecommunications, energy and transportation sectors.WT/TPR/M/68
Page 14
46. Regarding investment, she asked for comments on the recent changes in the Industrial Policy,
which explicitly discouraged foreign investment in certain sectors, including ready-made garments,banks, insurance companies and other financial institutions.  She also sought more information
regarding standardized format for the proposed government procurement currently under discussion.
She noted the importance of the Integrated Framework as an important vehicle to better integrate
LDCs in the world trading system and asked the Bangladeshi authorities to share their experience of
the Integrated Framework.
47. The representative of the Czech Republic stated that his country provided duty-free and
quota-free access to all products originating from Bangladesh.  He welcomed Bangladesh's efforts to
liberalize the trade and investment regimes and encouraged Bangladesh to continue efforts in this
regard as well as to implement structural reforms.  He sought details on how the Bangladeshi
authorities intended to privatize the ailing state-owned enterprises, especially in the field ofinfrastructure, and on development plans for Bangladesh's gas industry.
48. The representative of Uruguay stated that the agriculture sector had accounted for 30% of
GDP and 63% of total employment, while the services sector accounted for 61% of GDP and had
been increasing.  He wondered how Bangladesh fo resaw changes in the structure of the economy in
the near future, in particular, the role of agriculture in an increasingly service-dominated economy.
49. The representative of Sri Lanka shared the view expressed by India that the mandate of TPR
was to review a country's trade policy regime, not to address the issues of governance and corruption.
He stated that the integration of LDCs, including Bangladesh, to the multilateral trading system could
be enhanced through the provision of duty-free and quota free market access.  In a regional context,
Sri Lanka had extended tariff concessions on a large number of products to Bangladesh and other
LDCs under the SAPTA.  Finally, he noted that provisions concerning the extension of special
treatment to LDCs should be operationalized in order to accommodate their difficulties inimplementing various WTO Agreements.
50. The representative of the United States stated that his country's GSP programme and quota
arrangements had helped Bangladesh's export growth.  The United States was Bangladesh's largest
overseas market, absorbing US$1.9 billion or 40% of its exports in 1999, and was also the largest
consumer of apparel products from Bangladesh, wh ich comprised approximately 85% of U.S. imports
from Bangladesh.  He encouraged Bangladesh to reconsider its import bans on a number of textile and
apparel items, which could undermine the international competitiveness of producers, induce
smuggling, and limit new business opportunities.  He also expressed concerns about Bangladesh's
heavy dependence on textile and apparel exports, which accounted for 84% of its exports, and the
need for greater diversification.
51. The United States was working with other WTO Members, through the Integrated
Framework, to address the problems of implementation faced by LDCs.  The United States expected
to provide over US$2 million in trade-related technical assistance activities to Bangladesh in 2000,
which would address market access, tariff reduction, agricultural, sanitary and phytosantiary issues,
business development and training, transparency and regulatory reform, and trade facilitationmeasures.  He also encouraged Bangladesh to send experts from Dhaka to the July WTO TBT
workshop.
52. The United States was pleased that Bangladesh was working with the ILO to reduce child
labour.  Since 1995, some 9,000 former children garment workers had been provided with educational
opportunities.  To encourage further progress in this area, the United States had announced anUS$8.6 million assistance package.  He hoped that Bangladesh would undertake similar efforts to
develop rights of association for workers in export processing zones.WT/TPR/M/68
Page 15
V. REPLIES FROM THE REPRESENTATIVE OF BANGLADESH AND ADDITIONAL
COMMENTS
53. The Chairperson invited the representative of Bangladesh to focus his responses on three
themes:  (i) economic environment;  (ii) trade policy by measure;  and (iii) sectoral trade policies.
(i) Economic environment
54. The representative of Bangladesh stated that growth with equity and justice through poverty
alleviation had been the main objective of economic policies since liberation in 1971.  The
Government had emphasized sound macroeconomic management to ensure high growth and low
inflation.  In FY99, GDP had grown at 4.88%, compared to 5.23% in FY98, and was projected to
grow at 5.5% in FY00.  The investment-GDP rati o was expected to grow, from 22.19% in FY99 to
22.41% in FY00, as were the gross national savings-GDP ratio, from 22.26% to 22.60%, and gross
domestic savings-GDP, from 17.66% to 17.78%.  Total revenue receipts were expected to increase toTk 241.51 billion in FY00, from Tk 197.00 billion in FY99, with a revenue-GDP ratio of 10.01%,
from 8.97%.  At the same time, total expenditure was expected to increase from Tk 297.64 billion to
Tk 361.78 billion;  this included an increase in expenditure on the Annual Development Programme,
from Tk 140.00 billion to Tk 155.00 billion.  As a result, the overall deficit was projected to increase
from 4.58% in FY99 to 4.98% in FY00.
55. Bangladesh's commitment to good governance was reflected in its reform of the legal
framework, including speedy delivery of justice, strengthening of law enforcement capacity,
enhancing people's participation in local government, reforming public administration, and improving
public service delivery.  To improve economic transparency and accountability of government
finance, the Government had introduced a new budget classification in FY99, as well as computerized
accounting system and network;  core financial rules and regulations had been updated.
Modernization of customs administration throug h the adoption of computerized assessment and
documentation was expected to reduce the scope for discretion by custom officials.  At the same time,
under the newly introduced PSI system, external firms were engaged to check import-related records
and to make assessment.  The value-added tax, assessed on the basis of records or accounts of
transactions, substantially reduced direct policing of manufacturing establishments, which was
characteristic of the system of excise duties.  In the area of personal income tax and corporate tax, thescope of self-assessment had been extended.
56. Bangladesh had reduced the Government's involvement in market activities, which had been a
breeding ground of corruption.  Government permi ssion was no longer necessary to for private
entrepreneurs to set up an industry or to trade, or  even for foreign investors to own 100% equity.  The
entrepreneurs must register with the Board of Investment, primarily for the reason of registering theiridentity;  this was not a regulatory sanction.  At the same time, privatization of public enterprises had
been pursued progressively;  the Privatization Board, which was charged with privatization of the
50 identified SOEs, had handed over six SOEs in FY99, bringing the total number of SOEs privatized
to 18 units.  The sale of seven more SOEs had been finalized and additional sales of shares of
17 companies was under-way.  The Government was currently enacting a privatization law, whichwould provide greater autonomy to the Board and simplify legal procedures for speedy disposal.  It
had also taken initiatives to re-train retrenched  workers, provide better severance benefits, and
advocate the benefits of privatization to the public.  The establishment of the National Human Rights
Commission and the Office of Ombudsman was under consideration, based on other countries'
experiences.  The Government was working on reform of the legal and judicial system, withassistance from the World Bank.WT/TPR/M/68
Page 16
57. Bangladesh's exports had high commodity concentration, with five or six items accounting for
over 90% of export earnings.  Textiles and clothing alone accounted for about 75% of total exportreceipts.  Efforts to diversify its export basket had been made through liberalization of the import
regime to reduce the anti-export bias.  To encourage development of new export commodities, various
export incentives had been provided, including duty-free import of capital machinery and raw
materials, identification of "thrust sectors" for exports development, duty drawback and special
bonded warehouse facilities, financial assistance up to 50% of the cost for market promotion, andincome tax rebate of 50%.  Other export diversif ication efforts involved the implementation of the
Export Diversification Project with assistance from the World Bank, establishment of export
processing zones, participation in trade fairs abroad and export facilitation measures by the Export
Promotion Bureau, and the establishment of backward linkage industries to increase value addition of
major export items.
58. Bangladesh was a member of two regional trade arrangements, the SAARC Preferential
Trading Arrangement (SAPTA) and the Bangkok Arrangement, and was also a member of the newly
formed BIMSTC, D-8, and IOR-ARC, which did not involve trade arrangements.  Bangladesh had
concluded bilateral trade agreements with 28 countries, focusing on export promotion.  As a founding
member of WTO, Bangladesh was fully committed to the multilateral trading system.  With the aimof enhancing market access in the developed and more advanced developing country markets,
Bangladesh and other LDCs were seeking "duty-free, quota-free" market access for all their exports,
as well as technical assistance to strengthen domestic capacity for export production and to implement
WTO commitments, including notifications.
59. The discussant stated that Bangladesh's main economic objectives, i.e. growth with equity and
justice, had the full support from his country as well as other development partners.  He had noted the
steps taken by Bangladesh to improve governance and hoped that, combined with its already liberalinvestment regime and accelerated privatization process, these initiatives would bring in much needed
foreign investment to Bangladesh.  He emphasized the importance of implementing WTO
commitments, and hoped that any difficulties Bangladesh was facing could be addressed through
technical assistance, in particular, the Integrated Framework.
(ii) Trade policy by measure60. The representative of Bangladesh stated that his country was pursuing an export-oriented
growth strategy led by the private sector.  The tr ade, investment and foreign exchange regimes had
progressively been liberalized.  In the area of trade policy, the number of QRs had been reduced:  of
124 items under QRs, only 28 items were restricted on trade grounds, of which five were banned and
six were restricted.  The maximum effective tariff rate had been reduced from 100% in FY93 to37.5% in FY00, and the number of tariff rates had been reduced from nine to five.  The unweighted
tariff rate had fallen from 47% to 17%, while the import weighted tariff rate had declined from 24% to
15% during the same period.  However, there had been a slight increase in tariff dispersion.
61. Bangladesh did not provide less than MFN tariff treatment to any country.  He said that it was
not be possible for Bangladesh to consider reducing its bound rates to the applied level since it wouldlimit the country's ability to respond to its development needs.  Bangladesh had no seasonal tariffs and
had non- ad valorem  tariffs on only three items, i.e. gold in different forms.  No imported product was
taxed differently if imported for industrial or for retail use.  Tariff exemptions and concessions were
provided on capital machinery, intermediate goods, and raw materials used in export production.
Import licences were no longer required.
62. Reforms in the Import Policy had involved the abolition of the Pass Book system, separation
of lists of Banned Items and Restricted Items, abolition of barter and special trading arrangements,WT/TPR/M/68
Page 17
extension of the policy duration from two to five years, and reduction of the number of banned and
restricted items.
63. The most significant change in customs procedures since 1992 was the recent shift from the
tariff value system to the WTO valuation system, together with the introduction of mandatory PSI,
effective from 15 February 2000.  In 1996, Bangladesh had introduced provisions on anti-dumping,
countervailing and safeguard measures , in Section 18 of the Customs Act.
64. Bangladesh had accepted the Code of Good Practice of the WTO Agreement on Technical
Barriers to Trade.  Bangladesh's policy objectives in this area were to strengthen the institutional
framework related to setting standards and technical regulations, with the aim of ensuring that its
exports were capable of meeting the standards and other technical requirements of developed-country
markets.  The Import Policy Order contained labeling and packaging requirements for imports, as well
as sanitary and phytosanitary regulations set in accordance with the norms in the Pure Food Ordinanceand Quarantine Ordinance.
65. Bangladesh did not currently have legislation on government procurement, but a "Purchase
Manual", developed by the Department of Supply and Inspection, had laid down procedural rules and
transparency requirements regarding procurement.  Generally, government purchases were made
through open bids and in a transparent manner.  In case of aid-funded procurement, the purchaseprocedures of the World Bank and Asian Development Bank were followed.
66. With regard to intellectual property rights, Bangladesh was a signatory to a number of
international conventions and treaties in the areas of patents, trade marks and industrial designs.  A
new law had been drafted in accordance with the provisions of the TRIPS Agreement, and was
awaiting parliamentary approval.
67. Bangladesh's investment regime was liberal;  private investment was allowed without any
ceiling in all sectors except for four "restricted" sectors.  The foreign investment regime was one ofthe most liberal in the region.  The exchange rate had been liberalized by making the taka fully
convertible for current account transactions, and a flexible exchange rate policy had been followed
with periodic "exchange rate adjustments" to keep the rate competitive.  The exchange rate was
determined on the basis of the real effective exchange rate index, which was calculated on the basis of
a trade-weighted average of a basket of currencies of 15 major trading partners of Bangladesh withthe U.S. dollar used as intervention currency.
68. The representative of Japan sought confirmation that Bangladesh had replaced its customs
valuation, which had been based on minimum values and price registration, by the transaction system
as of 15 February 2000, and enquired whether these had been any difficulties in the transition.  He
also encouraged Bangladesh to increase the level of bindings, particularly for industrial products, andto reduce the bound level to the applied level as this was crucial in improving transparency at
customs, and thus promoting trade and investment.
69. The representative of the European Union took  note of Bangladesh's confirmation regarding
transition to the transaction value system.  He asked for clarification whether Bangladesh provided
subsidies to exporters of textiles and clothing.  He felt that lack of tariff bindings in Bangladesh'stariff regime constituted a major impediment to trade and thus encouraged Bangladesh to increase the
level of bindings so as to increase the predictability of the trade regime.
70. The representative of Bangladesh stated that the transaction value system, introduced as of
15 February 2000, had replaced the valuation system based on the Brussels concept.  The earlier
minimum value system, which had used tariff value or invoice value, whichever the higher, as theWT/TPR/M/68
Page 18
basis for customs assessments, had been abolished as of 15 February 2000, except for petroleum
products, which was imported only by the Bangladesh Petroleum Company.  At the same time, theGovernment had introduced the mandatory PSI syst em whereby evaluation of international markets
were used as the basis of assessment by the three appointed international PSI companies.  Therefore,
there was no longer room for discretion by customs officials to enhance or reduce the tariff values.
Moreover, many customs-related problems woul d be addressed under the on-going Customs
Administration Modernisation Programme, financed by the World Bank.
71. Regarding export subsides, cash assistance of 25% of the f.o.b. export value was provided for
100%-export-oriented textiles and garment industries, in lieu of duty drawback, bonded warehouses,
or EPZs.  At the same time, export marketing assist ance at 10% of the f.o.b. export value was allowed
for jute yarn and jute twines.  Referring to footnote 1 of Article 1 of the Agreement of Subsidies of
Countervailing Measures, in his view, the 25% cash assistance was not a subsidy as it did not exceedthe amount of duties and taxes refundable on imports of inputs for the exports.  On the other hand, the
10% export marketing assistance did constitute an export subsidy.
72. The representative of Japan expressed appreciation for Bangladesh's efforts to reduce the
discretion of customs officials.  He asked when conversion of its operative tariff schedule from the
ten-digit to eight-digit HS system would be completed.
73. The representative of Bangladesh noted that the task of conversion had already been taken up
as a part of the Customs Modernisation Project, and could be implemented under the next budget.
74. The representative of Djibouti noted that Bangladesh was doing its best to implement WTO
Agreements.  He hoped to provide special and preferential treatments to Bangladesh.
(iii) Sectoral trade policies
75. The representative of Bangladesh said that textiles and clothing accounted for about 75% of
its annual export earnings.  The sector had grown in the MFA environment where Bangladesh had
enjoyed market access under the generous U.S. quota and quota-free market access under the EU's
GSP facility.  Domestic policy measures, including the back-to-back L/C facility and bonded
warehouse facility, had also helped to expand production capacities.  As a consequence, the
ready-made garment industry had grown to provide employment for about 2 million workers, of
which 90% were women.  The Government realized that any set-back in this sector after the phasingout of the MFA could be catastrophic to its economy as well as its social structure in which woman
had moved up the ladder.  As Bangladesh had catered for the lower end of U.S. and EU apparel and
textile markets, it was recognized that the Bang ladeshi producers might become less competitive in
these markets without preferential access.
76. It was of paramount importance for Bangladesh to receive duty-free and quota-free access for
its textile and clothing exports in its traditional markets as well as in other developed and developing
countries.  The duty-free access would raise the long-term competitiveness of the sector, while the
quota-free access would help enlarge its production base and improve productivity due to economies
of scale.  In this connection, he recalled that the WTO Agreement on Textiles and Clothing had
provisions for faster growth rate and accelerated phase-out of quota in the case of small suppliers, andsuggested that it could be extended to LDCs.  Since the transition agreements for the MFA phase-out
period, concluded between Bangladesh and the major importing countries, had not provided
Bangladesh with any additional benefits as an LDC, additional market access would help to create a
more vibrant and competitive apparel sector in Bangladesh.  Therefore, he asked Bangladesh's major
trading partners to agree to revise the transition agr eements in order to incorporate a faster growth rate
and accelerated phase-out provisions of the ATC.  On the domestic front, Bangladesh was trying toWT/TPR/M/68
Page 19
raise competitiveness in the textile and apparel sector through various programmes with the aim of
establishing competitive backward linkage industries.  Moreover, the sector had taken steps toeliminate child labour in the RMG factories and had gradually adopted ethical standards of the
importing countries.
77. Regarding infrastructure, development of infrastructure required large investment and current
investment was about 2-3% of GDP, compared with  requirements of 7% of GDP.  To meet the
remaining gap, the Government had opened power, telecommunications, oil, gas and naturalresources, toll roads and ports, to private investment, including on the basis of
build-own-operate/build-operate-transfer (BOO/BOT).
78. In the power sector, the Government had develo ped a policy framework aimed at reducing the
present power deficit and creating adequate reserve capacity.  In this context, several institutions had
been created:  the Power Cell, to restructure the power sector and negotiate terms and conditions withindependent power producers;  the Infrastructure Investment Facilitation Centre, to assist in project
negotiation and development;  and the Infrastructure Development Company, as a project finance
company, and the Hydro Carbon Unit in Energy Division.  During the 1996-2000 period, Bangladesh
had added 1,256 MW in power generation, including 372 MW from the private sector, which had
increased power supply by more than 40%.
79. Since 1996 supply of gas had increased by 30%.  Onshore and offshore sedimentary areas had
been divided into 23 blocks for exploration of oil and gas, and were being given to international oil
companies under production sharing contracts.  After assessing the reserve position, Bangladesh
might allow export of gas while keeping adequate provision for its domestic needs for 50 years.
80. The National Telecommunication Policy, approved in March 1998, provided the basic policy
guidelines for expansion and development of the sector.  In this context, an independent Commission,
soon to be created, would act as a regulatory body for creating a competitive and non-discriminatoryenvironment among operators while protecting consumer interests.  Moreover, in order to meet
contemporary needs of the sector, promulga tion of a new telecommunication law was under
consideration.  The Government had already allowed private companies to provide cellular mobile
and rural telecommunication services;  in the medium and long term, the private sector was expected
to lead the sector.
81. Considerable progress had been achieved in road transport through the construction of several
bridges, highways, and other road networks.  The appropriate corporate structure for the Bangladesh
Railway was under consideration.  An integrated project to set up port facilities and container terminal
in Chittagong and Dhaka would include investment by a foreign company.  The Bangladesh Biman
was also in the process of privatization.
82. Bangladesh's financial sector was suffering from the banking sector's large non-performing
loan portfolio.  To improve the situation, amendments had been made in the Banking Companies Act,
1991 and the Financial Institution Act, 1993 to strengthen recovery of loans, penalties for default and
provisions for bankruptcy.  Loan classification and loan loss provisioning rules had also been
tightened.  As a result, the share of non-performing loans in private domestic banks had declined from45% in December 1994 to 29% in September 1999.  The Bangladesh Bank Order 1972 had also been
amended to provide more authority to the Central Bank.  The Money Loan Court Act was now under
implementation.  Amendments were being introduced to the Securities and Exchange Commission
Act, 1993 and the Securities and Exchange Ordinance, 1969.  Moreover, the Securities and Exchange
Commission had taken initiatives for adoption of International Accounting Standards (IAS) andInternational Standards of Auditing (ISA) in all listed companies.  He expected that full
implementation of these measures would result in much needed improvements in the financial sector.WT/TPR/M/68
Page 20
83. The discussant noted the importance of duty-free and quota-free access for Bangladesh's
RMG exports, and shared Bangladesh's wish to extend the transition period under the ATC.  He
acknowledged Bangladesh's efforts in improving child labour and encouraged it to continue its efforts.
He welcomed the steps taken to improve infrastructure as well as the opening-up of energy and
telecommunications for competition and new technology.  However, the financial sector remained an
area of concern, and he encouraged Bangladesh to accelerate the reform.
84. The representative of the European Union suggested that there was an apparent contradiction
in Bangladesh's comments regarding rules of origin:  while Bangladesh had described the EU's
preferential rules of origin as stringent and therefore constituting a market access problem, it had
appealed for more preferential treatment for LDCs, particularly vis-à-vis those for developing
countries.  He noted that the preferential rules of origins were to ensure that benefits of such
preferences were restricted to those entitled to them.
85. The representative of Bangladesh stated that it was requesting softer and more relaxed rules
of origin that would support  LDCs' production and exports.
86. The representative of the European Union reiterated that the objective of preferential rules of
origin was to ensure full benefits of preferential market access to LDCs, and to prevent developing
countries from free-riding.
87. The representative of Bolivia expressed appreciation for the efforts made by Bangladesh to
prepare answers for the Review.WT/TPR/M/68
Page 21
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
88. We have had open and useful discussion on Bangladesh's trade and related policies.  Members
of the TPRB have been impressed both by Bangladesh's economic growth since its previous TPR and
by its pursuit of trade liberalization in the context of wider structural reforms.  The economic growth
and progress on structural reforms have been accomplished despite immense difficulties facing
Bangladesh, including devastating floods and political instability.
89. Impressive though its recent economic growth has been, it had not been sufficient to make
much, if any, of a dent in the poverty that pervades Bangladesh.  Moreover, Members felt that the full
benefits of the structural reforms, including trade and investment liberalization, that Bangladesh has
taken could not be realized without further steps to improve the provision of essential infrastructure
services, notably power, telecommunications, transport and port facilities, and strengthen the banking
sector as well as measures to enhance governance.  Inadequate infrastructure and other essentialservices together with weak governance increased the costs of doing business in Bangladesh.
90. Members commended Bangladesh for its strong support of the multilateral trading system,
particularly its efforts as a leading LDC to ensure that the specific needs and concerns of LDCs are
addressed.  Members expressed their appreciation of Bangladesh's efforts to pursue trade
liberalization, including large tariff reductions, rationalization and simplification of the tariffstructure, the elimination of some quantitative restrictions and the opening-up of state-dominated
services to the private sector.  Members also commended Bangladesh for its liberal foreign investment
regime.
91. At the same time, Members voiced a number of concerns, referring inter alia  to:  the
relatively few tariff bindings;  the large discrepanc y between the applied and bound tariff rates;  the
complexity of the border tax regime, which involved numerous tariff concessions and additional
charges;  the lack of transparency, and the need to streamline, both customs and tax administration;the Government's weak revenue base necessitating its heavy reliance on border taxes;  Bangladesh's
narrow export base, which is dominated by ready-made garments;  and an inefficient banking sector.
Members also encouraged Bangladesh to make use of the GATS framework for making its
liberalization efforts credible in the state-dominated  services sectors, thereby fostering investment in
these sectors.
92. In addition, Bangladesh was encouraged to ensure that any future regional arrangements do
not interfere with or diminish the value and role of the multilateral trading system.
93. Members noted the difficulties faced by Bangladesh in implementing WTO agreements,
including notification obligations;  these are not unique to Bangladesh, but are shared by many
developing countries.  Consequently, there was unanimous agreement that more technical assistanceought to be provided to Bangladesh and other LD Cs, particularly through the Integrated Framework,
in order to strengthen its institutional and technical capacity in the trade policy area.  It was
recognized, however, that assistance would not address all Bangladesh's problems.
94. Members requested clarification on a number of more specific matters, including:
- measures to improve the fiscal situation and raise the quality of public spending;
- steps to speed up structural reforms;
- the adoption of the WTO Agreement on Customs Valuation and the use of mandatory
pre-shipment inspection;
- the changing role of the Bangladesh Tariff Commission;WT/TPR/M/68
Page 22
- import clearance requirements, including radioactivity tests for food imports;
- import prohibition on grey cloth and other textile products;- government procurement procedures;
- measures to improve public accountability and administrative competence;
- proposed amendments to Bangladesh's legislation protecting intellectual property
rights;
- pre-clearance requirement for investment in ready-made garment and financial
services sectors;
- steps to liberalize and thereby improve essential infrastructure services, notably
power, telecommunications and transportation;
- measures to liberalize and thereby strengthen the financial sector;
actions to broaden Bangladesh's export base;  and
- Bangladesh's strategy for developing its natural gas sector.
95. Members greatly appreciated the clarification and responses provided by the Bangladesh
delegation.
96. In conclusion, it is my feeling that this has been a successful Review of Bangladesh's trade
policies.  Members encouraged Bangladesh to persist in its economic reforms;  these will improve thequality of life of its people, including through the alleviation of poverty.  Bangladesh is to be
commended for its commitment to WTO principles and its leadership in this institution.  We look
forward to Bangladesh's continued active participation in, and integration into, the multilateral trading
system.  I encourage all Members to continue their support for Bangladesh's efforts;  Bangladesh's
reform efforts need and warrant the full support of the multilateral trading system.WT/TPR/M/68
Page 23
ANNEX
ADVANCE WRITTEN QUESTIONS AND RESPONSES BY THE
DELEGATION OF BANGLADESH1
JAPAN
Customs valuation
As stated in paragraph 17, page 35 of the Secretariat Report, Bangladesh, as a developing country,
had up until 1 January 2000 to bring its valuation system into conformity with the Agreement on
Customs Valuation.  Did Bangladesh fully implemen t the Agreement on 1 January 2000?  Does this
mean that Bangladesh does not apply minimum value method any more?  Please explain the measures
taken by Bangladesh to adopt all provisions of the Agreement.  Under the minimum value system,importers are required to submit the documents for registration of prices and re-registration for
lowering the price is hardly accepted.  Is our understanding correct that both minimum value system
and this price registration system are abolished in conformity with the Agreement?
Bangladesh could not implement the agreement on 1 January 2000.  But it could implement
the valuation system into conformity with the agreement from 15 February 2000.  Both minimumvalue system and price registration system are abolished in accordance with the agreement.
Tariffs
Japan appreciates that Bangladesh has been able to reduce its maximum applied tariff rate from
350% in 1991/92 to 37.5% in 1999/2000.  On the other hand, Bangladesh binds only 0.9% of
industrial tariff lines.  Furthermore, even those tariff lines, which are bound, are at the high level of
50%.  Does Bangladesh have any intention to bind those tariff lines which still remain unbound, or
even to reduce the bound rate to the level of the applied rate?  (Paras. 29 and 30 of the SecretariatReport).
At this moment in time Bangladesh is not considering to bind those tariff lines for industrial
products that still remain unbound, or even to reduce the bound rate to the level of the applied rate.
Although, for agricultural products, all tariff lines are bound, 92% of the tariff lines are bound at
200%.  Does Bangladesh have any intention to reduce the bound rate to the level of applied rate?
Bangladesh is not considering to reduce the bound rate to the level of applied rate for
agriculture products.
Customs officers in Bangladesh seem to benefit from a wide discretion in determining the applied
rates.  In what way does Bangladesh intend to improve this situation?
Bangladesh Customs Tariff (BCT) schedule have 8-digit HS Code while Bangladesh customs
operative schedule have 10-digit HS Code for which there have been some scope for variation in
determining the applied rates.  But through the implementation of the ongoing Customs
Administration Modernization (CAM) project the Government intends to convert the 10-digit
                                                     
1 Unless otherwise specified, all references to page s and paragraphs relate to the Secretariat's report
WT/TPR/S/68.WT/TPR/M/68
Page 24
HS Code of the operative schedule to 8 digit HS Code in line with the BCT which will eliminate the
discretion in determining the applied rates.
Import licensing
Please explain whether Bangladesh fully implem ents the Agreement on Import Licensing, as well as
Article VIII of the GATT.  Please also explain any difficulties that may exist concerning
implementation.
Bangladesh's import control regime is in full compliance of the provisions of the Agreement
on Import Licensing Producers.  The rules for import control are neutral in application and
administered in a fair and equitable manner.  These are set for five years and published in the official
gazette.  Any changes are notified through Public Notices published in national dailies.  There is no
discrimination among importers of free items and those of restricted items in allocation of foreign
exchange.  Prior permissions of recommendations from certain government agencies may be likenedto non-automatic import licensing.  These are administered in a transparent manner and details of how
to make such a request and the circumstances under which such requests would be considered are
published in the Import Policy Order or Public Notices issued thereunder.  Bangladesh does not
maintain any quotas in respect of quantity.  The only value ceiling applies to import of second hand
clothing and this is applied on an MFN manner.  Bangladesh has already notified the WTO of itsimport control regime and has made copies of the current Import Policy Order 1997-2002 available to
WTO Secretariat.
The only fees that could fall under the purview of Articles VIII of the GATT is the import
LCA/permit fee which is levied at the flat rate of 2.5% on all imports exceeding Tk  100,000.00
(roughly US$2,000.00).  This nominal fee does not represent an indirect protection to domestic
products.  Nor is it a taxation for fiscal purposes.
TRIPS
Article 50 of the TRIPS Agreement states that the judicial authorities shall have the authority to order
prompt and effective provisional measures to prevent an infringement of any intellectual property
right from occurring and to preserve relevant evid ence.  Please explain how  Bangladesh implements
this provision.  Please also provide information on the relevant provisions regarding the Provisional
Measures.
In section B. (Provisions of the TRIPS Agreement applicable to patent) of Table III.21, proposed
amendments are listed regarding to Articles 25 and 26 of the TRIPS Agreement.  However, these
Articles are those relating to industrial designs.  (Page 83 of the Secretariat Report).  Could
Bangladesh clarify which Articles these amendments exactly relate to?  Do there exist any amendment
which are being proposed regarding industrial designs?
The judicial authority in Bangladesh deals with infringement of Trade Marks matters as far
provisions of Trade Marks Act, 1940 and Rules made there under in addition to the provisions of
Bangladesh Penal Code.  Infringement of Trade Marks matters have widely been incorporated in the
draft Trademarks Law.  In the meantime, the Government is actively considering for incorporation of
the article of TRIPS agreement in the Proposed Trademarks Laws.
Section 29 of the Bangladesh Patents and Designs Act 1911 appears to be adequate to
implement the provisions of the Article 50 of the TRIPS Agreements on Patent infringement.WT/TPR/M/68
Page 25
The relevant section in the Bangladesh Patents and Designs Act 1911 is as under:
Section 29(1)  A patentee may institute a suit in a District Court having jurisdiction to try the
suit against any person who, during the continuance of the patent acquired by him under this Act in
respect of an invention, makes, sells or uses the invention without his licence or counterfeits it or
imitates it.  Provided that where a counter claim for revocation of the patents is made by the
defendant, the suit, along with the counter claim sh all be transferred to the High Court for decision.
Every ground on which a patent may be revoked under section 26 shall be available by way ofdefence to a suit or infringement.
Investment
It is reported that Bangladesh has imposed a new prior-clearance requirement for investment in
sectors concerning banks, insurance companies and other financial institutions.  Please explain the
criteria necessary for obtaining the prior-clearance.  Have those criteria been made public?(Para 146, p. 70 of the Secretariat Report).
The sponsors intending to set up a bank must apply to Bangladesh Bank in prescribed form or
obtain a licence.  Bangladesh Bank issue licence as per section of the Banking Company act 1991.
The requirements are:
- The proposed banking company shall be a public limited company.
- The minimum paid up capita must be Tk 400 million.
- The sponsors' equity shall be at least 50% of the paid up capital.
- The bank shall have to issue public share within four years from the commencement
of banking business.
- The minimum shareholding stake of each sponsor shall be Tk 2.5 milion.
- Sponsors shall not be allowed to participate in the proposed bank's equity by
borrowing from a bank.
- No person, company or members of a family shall buy more than 10% share of the
proposed bank either personally, jointly or in both, here "family" means and includes
spouse, father, mother, son, daughter, brother, sister of the person and any other
person dependent on such a person.
- The restriction of holding 10% of bank's share by a sponsor may be relaxed up to
25% in case of a bank to be set up in joint venture with foreign financial institution or
banking company.
- The sponsors of the proposed bank should be persons of repute in their respective
field including trade, commerce and industry.
- Any Advisor or Director to any other banking company shall not be a Director of the
proposed bank.
- Priority shall be given to the personal for setting up bank to be aimed at attaining
social goals like poverty alleviation, rehabilitation of women etc. along with the
commercial activities.WT/TPR/M/68
Page 26
The bank must formally approach the centra l Bank (Bangladesh Bank) along with following
documents:
- Copies of the certificates of incorporation and commencement of business of the
bank;
- Certified copy of the Memorandum and Articles of the Association;
- Audited Balanced Sheet of last three years;
- Copy of the resolution passed by he Board of Directors regarding opening of the
branch as well as appointment of the executive;
- Copy of the power of attorney executed by the bank favoring the executive;  and
- Copy of the licence issued by the concerned Central Bank.
Services
It is reported that the Government has allowed private-sector competition with the State-owned
airline on all domestic passenger routes as well as on national and international cargo routes.
Please explain the criteria necessary enabling private companies to obtain a licence.  (Para. 87,
p. 112, of the Secretariat Report).
As regards the criteria/requirements necessary for enabling private companies to obtain
licences there is no limitation on equity or investment size.  But the intending companies must beformed in accordance with the rules of the Company Act 1994 and registered with the Joint Stock
Company.  Foreign Companies will be registered with the Board of investment.  For operation in the
domestic lines, the requirement of minimum paid-up capital is Tk 20 million.  In the case of operation
of cargo in the international lines, the minimum paid-up capital requirement is Tk 50 million.
EUROPEAN UNION
II., (2), (ii)  Formulation and implementation of trade-related policies, para. 7
There is no national competition legislation in Bangladesh.  Some common law rules relating to
questions of unfair competition and trade secrets apparently exist, but are practically obsolete due to
non-application by the courts.  We are interested to know why the existing law on unfair competition
is not enforced and whether and when the Government of Bangladesh intends to provide itself with a
national legislation on competition?
There is no statutory Monopoly Control Authority on Bangladesh to enforce the existing law
on unfair competition.
The latest Industrial Policy 1999, the Export Policy 1997-2002, the Import policy of the
Government of Bangladesh point to the need of competition policy in the country.  But it is not clear
as to when Bangladesh is going to have a national legislation on competition.
II., (4), (i)  World Trade Organization, para. 25
Could Bangladesh provide further details of the di fficulties she currently faces in meeting her WTO
notification requirements.  Is it the requirements themselves or the capacity to make notifications?WT/TPR/M/68
Page 27
Notification requirements are quite complicated.  Moreover, weakness in the area of relevant
human resources has also constraint Bangladesh's capacity to make notification.  This is whyBangladesh has been requesting for technical assist ance for capacity building in various areas relating
to the multilateral trading system.
III., (2), (ii)  Customs valuation and inspection, para. 17
Could Bangladesh confirm whether the transaction value system of customs valuation was introduced
on 15 February 2000 as planned, and if not, when does she intend to introduce it?
Bangladesh introduced the transaction value system of customs valuation from
15 February 2000.
III., (2), (ii)  Customs valuation and inspection, para. 20
Could Bangladesh indicate for how long PSI will be needed as a transitional instrument for full
implementation of the transaction value system?  What steps does Bangladesh have planned to phase
out PSI completely and by when?
Presently there are three PSI agencies for three blocks employed for a period of three years.
The Government of Bangladesh has a Custom s Administration Modernization (CAM) programme
through which customs officials will be imparted the needed training for the implementation of the
transaction value system.  After proper training of the officials the PSI will be phased out gradually.
III., (2), (v), (e)  Supplementary duty, para. 53
What plans does Bangladesh have to bring her supplementary duty regime into accordance with
GATT Article III and by when?
Compared with the most developing countries, Bangladesh has gone far in respect of trade
liberalization and her tariff rates are lower in relation to those of many other countries. In order to
offset the obvious revenue loss the Government of Bangladesh has imposed supplementary duty on
certain items and the duty rate is not high.  Bringing the supplementary duty regime in line with theGATT Article III is being examined but no decision had been taken in this respect.
III., (2), (vi)  Import prohibitions and restrictions, para. 57
We note that import bans are currently placed on woven fabrics and that imports of grey cloth are
restricted to the ready-made garment industry.  Has Bangladesh considered introducing tariffs rather
than banning imports of these products to deter smuggling?
Bangladesh is committed to doing away with all import prohibitions and restrictions imposed
due to trade reasons.  The issue of lifting restrictions/bans on import of certain types of fabrics will be
examined at the time of formulating the next five Yearly Import Policy Order in 2002.
III., (2), (xii), (a)  Standards, testing and certification, para. 68
Has Bangladesh notified to the WTO TBT Committee any of her national standards (particularly
mandatory standards) which are not derived with international standards?  If not, does she intend to,
and by when?
Bangladesh is in the process of fulfilling its various notification obligations.  She does not
maintain any standard that are at variance with internationally accepted standards.WT/TPR/M/68
Page 28
III., (2), (xii), (b)  Labelling and packaging, para. 73
Could Bangladesh confirm whether the date of  manufacture has to appear on all imports?
It is not mandatory to mention the date of manufacture on all imported goods.  Only in the
case of some food items such as milk, milk-food, milk products, edible oil and other food items, drugs
and medicines etc., it is necessary to mention the date of manufacture, the date of expiry and the
composition of the item.
III., (2), (xiii)  Government procurement
How does Bangladesh guarantee the transparency of its procurement procedures?
What criteria do procuring entities use to determine which of the procurement methods (national or
international public tenders, limited tenders for registered suppliers, selected tenders, single tenders)
is applied in specific cases?
Does Bangladesh maintain equal access conditions for foreign bidders in cases where procurement
procedures are opened to foreign competition?
Does Bangladesh maintain any domestic preferences, offsets or similar restrictions?  If yes, are these
published in advance?
The standard time limits for tenders are 15 days in case of local purchase and 30 for international
purchase.  Does Bangladeshi practice contain the possibility for these periods to be altered (extended,shortened)?
How does Bangladesh ensure that procurement awar ds are made only on the basis of the submitted
tenders/bids?
Are unsuccessful bidders informed of th e outcome of the procurement proceeding?
Do they have the possibility to be debriefed?What judicial, arbitrage  or administrative review bodies or procedures does Bangladesh maintain to
deal with disputes on procurement?  How does it ensure that these bodies and procedures are fair,
independent and transparent?  What remedies are available under Bangladeshi law?
How does Bangladeshi law guarantee the confidentiality of proprietary information?Is Bangladesh willing to make a copy of its “Purchase Manual” available to the WTO Secretariat?
There are no standard rules under which all government procures are effected.  However,
there is a manual of the Department of Supply and Inspection which has outlined detailed rules
pertaining to both domestic and international tender.
III., (4), (ix)  Trade related intellectual property rights
Which steps/actions have been undertaken until now and/or are planned by the Government of
Bangladesh (GoB) in order to comply with th e commitments taken under the TRIPS Agreement and
which will be taken under the EC/BGD Co-operation Agreement?
Bangladesh is in the process of bringing its existing laws on IPR in conformity with her
obligations under the TRIPS Agreement.  Already a new law on copyrights has been framed
(substituting the existing copyrights ordinance) and the same has been placed in Parliament in theWT/TPR/M/68
Page 29
form of a Bill.  The same is now under examination by a Parliamentary Standing Committee.  It is
expected that it will soon become an Act.  Work is also going on in the areas of patents, trademarksand other IPR related issues.  In order to fulfill all the obligations under the TRIPS Agreement, the
Patent Office, Trademarks and Designs Office, Registrar of Copyrights and relevant Ministries need
to be strengthened and modernized.  Financial and t echnical assistance in this respect from the EU and
other donor agencies/countries would be welcome.
IV., (5), (ii)  Textiles and Clothing, para. 33
As MFA is dismantled and Bangladesh loses her current exemption from MFA quotas, she will face
increasing competition in her textile sector.  What plans does she have in place to help alleviate this
problem?
An unlimited supply of cheap labour is the ma jor source of Bangladesh's competitiveness in
the international apparels market.  In order to maintain and further enhance competitiveness, steps are
being taken to increase labour productivity through training programmes aimed at skills development.
Both the Government and the private sector are involved in the labour training exercise.  Efforts are
also being made to enhance labour productivity through improving industrial relations in the garments
industry.  Bangladesh is also trying to strengthen its backward linkage industries in the textile sector.She is also trying to move to the upper ends of the apparels market.  With this end in view, a Fashion
Institute has been set up recently in collaboration with the International Trade Centre, Geneva.
(WT/TPR/G/68), V., para. 29
Within the framework of the “Integrated Framewor k for Trade-related Technical Assistance to Least
Developed Countries Initiative“ of WTO, U NCTAD, ITC, UNDP, IMF and the World Bank, the
Ministry of Commerce on 22 January 2000 presented 34 project proposals to a donor public asking
for their financial support.  Until now, there has been little to no response to these project proposals
from potential donor side, as there is a need fo r a (currently lacking) firm underlying coherent
concept to the proposals.  The “List of Priority Projects for Trade-Related Technical Assistance"
could be considered a shopping list in need of precision in infrastructure (water treatment plants forthe leather industry), institutional capacity building (Ministry of Commerce, Bangladesh Tariff
Commission, and private sector organizations), priv ate sector diversification and marketing support
(handicrafts, gold jewellery, ceramic industry, tea and jute sector (another feasibility study for
identification of modalities for modernization of ju te mills in Bangladesh), leather sector), and human
resource development (scientists, ministry offici als, including the establishment of a Bangladesh
Foreign Trade Institute).  The effective and meaningful support of these projects to an enhancement of
the export capacity of the Bangladesh economy and a timely and actual diversification ofBangladesh’s export basket not been sufficiently substantiated.
The EC would like to know whether there are sector  policies within which the priority projects for
trade-related technical assistance have been designed, and how GoB intends to promote the funding
of these proposals among potential donors.
No written answer provided.
EUROPEAN UNION (Additional questions)
BGD's public procurement regime
Does the legislation on procurement cover the issue of time limits for the evaluation of bids?  If yes,
what is the length of this (these) time-limit(s)?  Are these time limits respected in practice?
No written answer provided.WT/TPR/M/68
Page 30
AUSTRALIA
Tariff
The Government's tariff schedule dated June 1999 indicates several steps to reduce a range of import
duties.  From 15 February 2000, however, a supplementary duty has been imposed on 275 items
whose import duty is 15% or more and whose annual import value is more than Tk  10 million
(US$194,174).  We would be grateful for an explanation of these increases.
With the abolition of tariff value and switching over to transaction value with effect from
15 February 2000 there was an apprehension that value of money of the tariff value items will fall for
the purpose of customs assessment with the consequential fall in government revenue.  To protect the
possible fall in Government revenue a supplementary duty has been imposed on many items (not all
items) on which assessment was made on the basis of tariff value.
Unwrought zinc currently attracts 5% supplemen tary duty, over and above the 38% effective
combined rate of duty, VAT and other charges.  It has a major use as an industrial raw material in tin
sheet galvanising factories in Bangladesh, and as such is used by a large group of the low to middle
income earners (e.g. for roofing).  Does the Government have any plan to withdraw or reduce the
duty on unwrought zinc?
Unwrought zinc used to be assessed on the basis of tariff value until it was abolished from
15 February 2000 when the transaction value came into effect.  The transacted value of the item
seems to be much lower than the earlier tariff value.  On calculation along with the newly imposed
supplementary duty it was focused that the revenue incidence is lower than the earlier assessed
incidence on tariff value.  However, this will be examined by the Government.
Compulsory preshipment inspection
The Government introduced a new preshipment inspection regime on 15 February 2000.  One
company is exclusively responsible for the preparation of inspection certificates for all goods from aparticular group of countries.  As there is no competition, the government-appointed inspection
company has a monopoly over its region.  There have been delays in granting the Clean Report of
Finding (CRF) and subsequent shipping delays.  Would the Government consider appointing
additional inspection companies for a particular bl ock of countries to increase efficiency?
Mandatory PSI regime has been introduced from 15 February 2000.  In the initial stage of its
introduction these might have been some delays in  issuing CRF in certain cases for lack of power
information supplied by the importers while opening letter of credit and for some other clarifications
by the NBR and the Bangladesh Bank.  Those proble ms have been mostly resolved in the meantime
and the others are being resolved gradually.  As a result the delay in issuing CRFS are being narrowed
and as such the shipment and clearance of goods from the ports are being accelerated gradually.  Sothe additional appointment to more companies are not needed at this moment.
Customs clearance
Bangladesh customs clearance procedures at its ports are onerous and complicated.  About
50 signatures are required before goods can be cleared.  This is not in accordance with the provisions
of Article VIII.  Does Bangladesh have any plans to simplify clearance and forwarding procedures atports?WT/TPR/M/68
Page 31
With the introduction of mandatory PSI system with effect from 15 February 2000 the pace of
customs clearance have been accelerated gradually and the cumbersome process of many signaturessystem have been abolished which ultimately made the system more simplified now.
Import policy – Radiation
In the aftermath of the Chernobyl nuclear disaster, the Government made radioactivity tests
mandatory for all import of food it ems.  Reports indicating the level of CS 137 per kilogram of item
must be prepared by the concerned authority of  the exporting country.  On arrival at Bangladeshi
ports, goods are tested again.  Perishable items in particular are at risk of spoilage due to the delays
generated by this double examination and by the lack of proper storage facilities at ports.  These
requirements are not in accordance with Technical Barriers to Trade (TBT) provisions within the
GATT, which determines that one test by a certified authority is sufficient.  Under its obligations, the
Government should waive requirements for duplicate radiation tests.  Will the Government alter theseprovisions accordingly?
In Bangladesh, provision for attachment of a radioactivity certificate for all imported
agricultural and food items has been laid down in the Nuclear Safety and Radiation Control Act, 1993
and Nuclear Safety and Radiation Control Rules, 1997.  According to the schedule - 13 of the said
rules, radionuclide contamination levels in food items like milk powder and dairy products is95 Bq/kg and 50 Bq/kg for other food materials.
Attachment of such a radioactivity certificate to be issued by the concerned authority of this
exporting country is needed to satisfy the provisions Nuclear Safety and Radiation Control Rules,
1997 of the country and to avoid future serious health related complications like cancer.  As per the
International Commission for Radiological Protection (ICRP) there is no threshold of radiation does
for fatal cancer and that the severity is independent of does.
THAILAND
Thailand commends various efforts by the Bangladesh Government to liberalize its economy in the
past decade.  We note with particular interest the lowering of maximum tariff rate from 300% in
1992-93 to 37.5% in 1999/00 (Report by the Secr etariat (WT/TPR/S/68) Summary Observations,
para. 10) and the withdrawal of rice from the import control list (Ibid., Table AIII.6, p. 139).
However, we remain concerned with the relatively high bound rates, the simple average of which is188%.  In particular, 92% of agricultural tariff lines are still bound at 200% (Ibid., p. 38, para. 30)
as a result of the Uruguay Round.  In view of the fact that Bangladesh has already reduced maximum
tariff rate to 37.5% and that the current average applied rate is 2.2%, we would like to inquire
whether the Bangladesh Government has any plan to change its bound rate to reflect its effort to
autonomously reduce tariff rates?
Bangladesh has no plan to reduce its bound tariff rate.
We were informed by our capital that, since Ju ne 1999, Bangladesh has lowered tariff for Maize
Starch (HS 1102.20) and Manioc Starch (HS 1108) from the previous rate of 40% for both items to
5% and 37.5%, respectively.  Could Bangladesh provide its reason for the different reduction rate
between these two products?  Is there any intention to lower tariff for Manioc Starch further to be the
same rate of Maize Starch, that is, 5%?
Lowering of tariff on Manioc (Tapixa) starch to the same rate is being reviewed and a
decision will be taken soon.WT/TPR/M/68
Page 32
THAILAND (Additional Questions)
Customs valuation
Bangladesh has until 1 January 2000 to bring its valuation system into conformity with the Agreement
on Customs Valuation.  According to the Secretariat Report (p. 35, para. 17), the transaction value
system should have been introduced and effective since 15 February 2000.  We would like to learn
more about the progress made so far regarding im plementation of the Customs Valuation Agreement.
Was the transaction value system introduced and in effect as anticipated?
Bangladesh could not implement the agreement on 1 January 2000.  But is could implement
the valuation system into conformity with the agreement from 15 February 2000.  Both minimum
value system and price registration system are abolished in conformity with the agreement.
Customs clearance
In the Secretariat Report, it was stated that according to one survey, customs delays have often been
cited by business as an impediment to conducting business in Bangladesh.  (p. 36, para. 24)  For
example, it take on average 12 days, but can take up to 30 days, for imported goods to be released
through customs at the ports.  These delays could be a result of port congestion, excessive checking
and paperwork, etc.  The Thai authority was informed by our private sector that they had encountered
some undue delays and difficulties at Bangladesh ports which had resulted in goods being damaged.Could Bangladesh please provide some details, in addition to what was given in page 36,
paragraphs 21-23 of the Secretariat Report, on pl an to improve its customs clearance procedures
further as a means to facilitate trade?
Bangladesh has further simplified its customs clearance procedures.  As a result fewer
signatures will now be required for customs clearance purposes.
Intellectual property
Thailand recognizes the fact that, as a least developed country, Bangladesh does not have an
obligation to fully implement its obligation under the TRIPS agreement until 2005.  Nevertheless, we
would appreciate it if Bangladesh could provide info rmation about its internal enforcement measures
to protect intellectual property rights particularly patents and trademarks – the two of which the
Thai Government received some complaints fr om our manufactures that there have been rights
infringements (for paint and leather goods).
There are both civil and criminal remedies against infringement of Intellectual Property rights
in the Copyright Ordinance of Bangladesh.
Under section 63 of the Copyright Ordinance all infringing copies of any work in which
copyright subsists and all plates used or intended to be used for the production of such infringing
copies shall be deemed to be the property of the ow ner of the copyright.  The owner of the copyright
may apply in the court of District Judge for the recove ry of all infringing copies and all plates.  Under
section 60 of the said Ordinance the court is empowered to ensure remedies by way of injunction or
compensation or decree.
The owner of the copyright may file cases in the court of Magistrate first class against
infringement of copyright.  Under sections 66 and 67 of the Copyright Ordinance the offence ispunishable with a fine which may extend to Tk 5,000 or with imprisonment which may extend to two
years or with both.  Under section 74 of the said Ordinance any police officer not below the rank ofWT/TPR/M/68
Page 33
sub-inspector, with warrant from the Magistrate is empowered to seize all copies of the work which
appear to him to be infringing copies and produce the seize copies before the Magistrate.  Undersection 73 of the Ordinance the court may, whether the alleged offender is convicted or not, order that
all infringing copies or plates be destroyed or delivered to the owner of copyright.
Under section 58 of the ordinance the Registrar of Copyright has the pow er to enter any ship,
vehicle, dock or premises to examine the infringing copies to prohibit importation of infringing
copies.  All infringing copies seized under this provision shall be deemed to be goods which areprohibited or restricted for importation under section 16 of the Customs Act and all the provisions of
Customs Act shall have effect accordingly.
Under section 42 of the Copyright Ordinance th e register of Copyright and the index and
copies attested by the Registrar and sealed with the seal of Copyright Office shall be prima facie
evidence in all courts.
NEW ZEALAND
Tariffs
The Secretariat Report notes that Bangladesh maintains a large gap between its bound and applied
tariff rates.  This enables Bangladesh to retain a great deal of freedom to raise its tariff rates
unilaterally, thereby creating a high degree of uncertainty to surround its customs tariff.  DoesBangladesh have a plan to reduce the gap between its bound and applied rates?
The Country Report notes that Bangladesh has recently reduced its maximum tariff rates to 37.5%.
The Secretariat Report refers to a number of additional duties and surcharges which are then
imposed, largely offsetting the advantages of the re duced tariff rates.  In view of this, what
programme does Bangladesh have for reducing its effective tariff rates?
Bangladesh will gradually reduce the gap between its bound and applied tariff rates,
consistent with her development needs and WTO obligations.
The additional duties and taxes paid by an importer in Bangladesh are:
(a) VAT at the rate of 15 %;
(b) Supplementary duty at different rates on some products;
(c) Infrastructure development surcharge at the rate of 2.5%;(d) Advance income tax at the rate of 2.5%;  and
(e) Import permit fee at the rate of 2.5%.
VAT and supplementary duties are imposed on both import and domestic products, and hence
they are trade-neutral and do not provide additional protection to domestic producers.  The other three
charges are levied on imports only.  However, the advance income tax is subsequently adjusted withactually payable income tax, and hence in the ultimate analysis it does not provide additional
protection to domestic industry.  The sole objective of the infrastructure development surcharge is to
raise revenue for developing the physical infrastructure for which there is a critical need.
In view of the above, the effective tariff rate will be gradually reduced by
reducing/withdrawing infrastructure development surcharge and import permit fee in consonance withan enlargement of the direct tax base.WT/TPR/M/68
Page 34
There are existing laws on patents and trademarks.  These are being brought into compliance
with the TRIPS Agreement.  Already a new law on copyrights (framed along the line of the TRIPSAgreement) has been placed before Parliament in the form of a Bill.  It is expected to become a law
soon.  Under the existing laws on patents and trademarks adequate legal remedies are there for any
infringement of the rights.  Anybody who feels his rights have been infringed may have recourse to
those legal remedies.
HONG KONG, CHINA
Customs valuation (pp. 34-35, paras. 14-17)
It is mentioned that the Bangladeshi Government ma y replace the lower invoiced price by available
tariff values.  Bangladesh's tariff value system officially sets minimum import prices.  It is also stated
that under the WTO Agreement on Customs Valuat ion, the Bangladeshi Government should have
introduced, effective 15 February 2000, the transaction value system for customs valuation purpose.Would the Bangladeshi Government share with us in formation as to the progress of implementation of
the Agreement on Customs Valuation, in pa rticular the transaction value system?
Bangladesh has already abolished the tariff value system almost on all items except on
petroleum products i.e. on Motor spirit and Dies el, the import of which is permissible only by
Bangladesh petroleum Corporation (BPC).  Go vernment of Bangladesh has already introduced
transaction value system for customs valuation purpose effective from 15 February 2000.
Telecommunications (pp. 106-108, paras. 62 & 67)
It is stated that the international telephone services, facsimile and data transactions services are
provided exclusively by the government-owned Bangladesh Telegraph and Telephone Board (BTTB).
As laid down in the National Telecommunication s Policy, the Bangladeshi Government would open
up all fields of telecommunications services, except international services, for private participation by
2010.  We are interested to know whether the Bang ladeshi Government have any plan to liberalize its
international telecommunications service.
According to the long term strategy mentioned in the National Telecommunication Policy,
development of telecom infrastructure and services in all the fields are to be opened up for private
participation after the year 2010.  If needed, this can be opened up earlier than the year 2010.  As a
mid-term strategy of the National Telecom Policy, on the basis of the performance of the privateoperators in the short term period, more service areas are to be opened up for private participation in
basic telephone and long distance network after the year 2000 or earlier.  These are very flexible
conditions.  The government's right to deviate from all these provisions for wider expansion of the
telecom services is also reserved in the Telecom Po licy.  However, it is also stated in the Telecom
Policy that the above time frame and targets are to be reviewed by the Government at the end ofyear 2000.
Recently Government has opened up the VSAT service for Internet and Data
communications.  According to new system subscribers can now negotiate with the VSAT operators
and they are allowed to take VSAT connection (any bandwidth) from any VSAT operator.WT/TPR/M/68
Page 35
CANADA
II., (2), (ii)  Formulation and implementation of trade-related policies, para. 8
According to the Secretariat’s Report, the Bangl adesh Tariff Commission (BTC) is an independent
advisory body under the Ministry of Commerce which  recommends tariff levels and other forms of
assistance for the protection of industry.  We have learned that since 15 February 2000, this system
has been replaced by a process of Pre-shipment Inspection (PSI) where an independent agent
establishes the tariff.  The new process has been the subject of complaint since agents seem to besetting tariffs which are higher than market prices.  Could Bangladesh share its thoughts on its
experience with PSI?
PSI companies do not determine tariffs.  They only help in correct classification of HS Code
and realization of proper duties by giving correct valuation of goods.
III., (2), (ii)  Customs valuation and inspection, para. 15
We note that the tariff values are reviewed every six months.  This creates a level of uncertainty in the
marketplace for both exporters and importers.  Could Bangladesh clarify how tariff values are
calculated and whether the concerns of importers and exporters are taken into account?
Bangladesh Government has abolished tariff values and implemented transaction value with
effect from 15 February 2000.
III., (2), (iii)  Customs clearance and administration, para. 26
What steps are being taken to reduce smuggling?
The appreciable reduction in customs duty rate that has been achieved is expected to reduce
smuggling through reducing its attractiveness.  Furthermore all-out efforts are being made to
strengthen vigilance at border posts.  Finally, punishment for smuggling is severe, including
imprisonment, which is expected to discourage smuggling.
III., (2), (iv)  Tariffs, paras. 28-29
We note that Bangladesh has undertaken extensive tariff reforms, including the reduction in the
number of tariff bands, however, the tariff schedule is confusing as some products are still subject to
multiple rates.  Does Bangladesh anticipate further reforms toward a simplified tariff schedule?
Yes.  NBR has launched a three year Custom s Administration Modernisation (CAM) project
to achieve this.  The matter relates to decision by NBR subject to recommendation from TariffCommission, Ministry of Commerce and Ministry of Textiles.
III., (2), (vi)  Import prohibitions and restrictions, para. 56;  and
IV., (5), (ii)  Textiles and clothing, para. 41
We note that Bangladesh imports 85% of its fabrics to meet the requirements of its clothing industry.
At the same time, bans or restrictions on the im port of a number of textile products are imposed.
These strict measures result in a high amount of smuggling and leakages from bonded warehouses.
The Agreement on Textiles and Clothing (ATC) will be fulfilled in 2005.  What plans does Bangladesh
have to be competitive in a more liberalized environment?WT/TPR/M/68
Page 36
It is not true that restrictions on some textile products leads to high amount of smuggling and
linkages from bonded warehouses.  Fabrics imported under the bonded warehouse system are talliedagainst exports of garments made out of those fabrics.  Hence, there is hardly any scope for large
scale leakage from bonded warehouses.  The restriction on import of fabrics is aimed at protecting the
small scale weavers and handloom operators.  The handloom sector and small-scale weavers supply
about 2/3 of total fabric needs of the country.  Recently, export of clothing made out of handloom
fabrics (as for example, Grameen Check) has also started.
An unlimited supply of cheap labour is the ma jor source of Bangladesh's competitiveness in
the international apparels market.  In order to maintain and further enhance competitiveness, steps are
being taken to increase labour productivity through training programmes aimed at skill development.
Both the Government and the private sector are involved in the labour training exercise.  Efforts are
also being made to enhance labour productivity through improving industrial relations in the garmentsindustry.
Supply of fabrics is not expected to constrain Bangladesh's competitiveness in the
post-liberalized trading environment because world production of fabrics is expected to increase after
MFA quotas are eliminated.  Nonetheless, the Gove rnment has adopted measures to stimulate the
growth of backward linkage industries in the textile  sector with the objective of increasing the use of
locally produced fabrics and other accessories by the export-oriented garments industry.  Thus, for
example, the textile industry has been included in the list of "thrust" sector in the Industrial Policy
1999.  This policy has started yielding dividends as more than two-third need of knit sector and nearly
one-fifth need of the woven sector is currently being met by local production.
Finally, it may be noted that Bangladesh has tabled the idea of duty-free market access for
exports from LDCs in various international fora including the WTO.  If Bangladesh's apparel exports
are granted preferential tariff treatment in developed country markets, they would complementBangladesh's national efforts to make her apparels exports competitive in the post-MFA liberalized
environment.
III., (2)  Measures Directly Affecting Imports, Table III.1
Could Bangladesh clarify the reason(s) that a "radioact ivity certificate" is required for the import of a
number of agricultural products, e.g., milk, edible oils, and poultry and animal feeds?
In Bangladesh, provision for attachment of a radioactivity certificate for all imported
agricultural and food items has been laid down in the Nuclear Safety and Radiation Control Act, 1993
and Nuclear Safety and Radiation Control Rules, 1997.  According to the schedule - 13 of the said
rules, radionuclide contamination levels in food items like milk powder and dairy products is
95 Bq/kg and 50 Bq/kg for, other food materials.
Attachment of such a radioactivity certificate to be issued by the concerned authority of the
exporting country is needed to satisfy the provisions Nuclear Safety and Radiation Control Rules,
1997 of the country and to avoid future serious health related complications like cancer.  As per the
International Commission for Radiological Protection (ICRP) there is no threshold of radiation dose
for fatal cancer and the severity is independent of dose level.
III., (2), (vi)  Import prohibitions and restrictions, para. 59
We understand that "if anyone feels adversely affected by a ban or restriction, the revocation of the
ban or restriction can be requested”.  Could Bangladesh elaborate on the process where anWT/TPR/M/68
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individual or company could make such a request?  Could Bangladesh provide details on import bans
or restrictions that have been revoked as a result of this process?
If an importer feels that an import ban or restriction is adversely affecting consumer welfare
through restricting competition, or if a productive enterprise, locally or foreign owned, believe that
production activity is hampered by an import ban or restriction, then the concerned importer or
producer can file a written application with the Bangladesh Tariff Commission (under the Ministry of
Commerce) requesting that the ban be lifted or the restriction withdrawn.  The Tariff Commissionundertakes a detailed technical study on the matter and makes its recommendation to the Ministry of
Commerce.  If the recommendation is to lift the ban or to withdraw the restriction, then the
Government in the Ministry of Commerce implements this by making necessary changes in the
Import Policy Order.
Given the procedure of revoking ban on restriction outlined above, it is very difficult to
provide details at such short notice on import bans or restrictions that have been revoked as a result of
this process.
III., (2), (xii)  Standards and other technical regulations, para. 76
The Bangladesh Atomic Energy Commission conduct s radioactivity tests on samples of food items.
Could Bangladesh clarify the rationale for undertaking such tests?  Is this applied to relevant fooditems from all sources?
The Bangladesh Atomic Energy Commission conduct s radioactivity tests on samples of food items.
Could Bangladesh clarify the rationale for undertaki ng such tests?  Is this applied to relevant food
items from all sources?
The Bangladesh Atomic Energy Commission is equipped with laboratory facilities and
equipment to carry out the radioactivity tests on behalf of the Government.  Though the permissible
level of radioactivity is 95 Bq/Kg for milk and milk products and 50 Bq/Kg for all other foodproducts, in most cases food grains and edible oils are found to contain the same radiation level of
2 Bq/Kg.  However, since several nuclear tests were conducted in our neighbouring countries, the
possibility of nuclear fallout and a consequent rise in artificial radioactivity level may lead to health
hazards.  It is therefore, necessary that regular testing of radioactivity levels in food products should
be done for safeguarding the national health.
The recent practice is that wheat and rice of European origin and edible oil from all sources
imported by Ministry of Food are tested for radioactivity.
IV., (6), (ii)  Telecommunications, para. 64
When is Bangladesh’s new Telecommunications Act expected to come into force?  Are any difficulties
or delays expected in establishing the Telecommunications Regulatory Commission (TRC).  How willthe TRC be financed (for example, through government support, licence fees, or levies on competitive
market participants)?
The proposed Act is expected to be placed in the Parliament very soon for enactment and it is
expected that by the end of this year the Act will be passed.  TRC will be established as soon as the
Act is passed.WT/TPR/M/68
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TRC will be financed through government funding.  It will also retain a portion of licence
fees, levies etc. for meeting the regulatory expens es with prior approval of the Government as has
been proposed in the Act.
Given Bangladesh's intention to encourage private sector investment and competition in the
telecommunications sector, are there plans to adopt the commitments included in the GATS Reference
Paper on basic telecommunications?
Yes, Bangladesh is one of the 72 countries to sign to the terms and conditions of the GATS
Agreement of the first phase.  As such, Bangladesh encourages private sector investment and
competition in the national telecom sector.  Some private companies are already providing some
services using the exchange, satellite by the T&T Board.  After 2005, private sector investment is
expected to take place in these enterprises and Bangladesh is likely to face open competition from
foreign investors as well.
IV., (1)  Introduction, paras. 2 – 3
According to the Secretariat’s Report, Banglades h has taken strides during the review period to
improve its basic infrastructure, including banking and telecommunications.  The Report goes on to
note that due to lack of finance, equipment and technical and management expertise in these
infrastructural services, the Government has turned its attention to private domestic and foreigninvestment for the development of these sectors.  However, the Report states that Bangladesh has not
made use of the GATS framework to build investor confidence with regard to its commitments to
liberalization of state-dominated services.  Have the Bangladeshi authorities considered making
further commitments under the GATS framework in these areas to encourage foreign investment?
Bangladesh is currently reviewing the situation and will decide whether further commitment
under the GATT's framework will be needed in the areas of banking and telecommunications to
encourage foreign investment.
IV., (6), (ii)  Telecommunications, para. 67
The Report states that the goal of the National Telecommunications Policy, 1998, is to facilitate
universal telephone service.  To achieve this goal, further participation by private investors, including
foreign investors, is encouraged.  According to the Policy, the Government would open up all fields of
telecommunication (except international services) for private participation after 2010 and possiblyearlier.  Recognizing that the provision of an essential infrastructure service such as telecoms is key
to economic development, Canada would like to know  if the Government of Bangladesh plan to open
up this area in advance of the 2010 target date?
Additionally, it is mentioned that a two-phase restructuring of the Bangladesh Telephone and
Telegraph Board (BTTB) is envisaged.  Canada would like to know if any timeline for this process hasbeen developed?
According to the long term strategy mentioned in the National Telecommunication Policy,
development of telecom infrastructure and services in all the fields are to be opened up for private
participation after the year 2010.  If needed, this can be opened earlier than the year 2010.  As a
mid-term strategy of the National Telecom Policy, on the basis of the performances of the privateoperators in the short term period, more service areas are to be opened up for private participation in
basic telephone and long distance network after the year 2000 or earlier.  These are very flexible
conditions.  The Government's right to deviate from all these provisions for wider expansion of the
telecom services is also reserved in the Telecom Po licy.  However, it is also stated in the TelecomWT/TPR/M/68
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Policy that the above time-frame and targets are to be reviewed by government at the end of
year 2000.
Recently government has opened up the VSAT service for Internet and Data communications.
According to new system subscribers can now negotiate with the VSAT operators and they are
allowed to take VSAT connection (any bandwidth) from any VSAT operator.  For restructuring
Bangladesh Telegraph and Telephone Board no time-frame has yet been considered.
IV., (6), (iii), (a)  Maritime transport and related services, paras. 71, 80
The Report states the Bangladeshi Government is in the process of preparing its National Shipping
Policy.  This draft policy emphasizes, inter alia, the urgent need for capacity expansion of the
national fleet, by encouraging pr ivate shipping companies to procure more ships.  (At paragraph 72,
it is mentioned that currently there is no foreign participation in the nationally owned or operated
fleet.)  Could the Bangladeshi authorities provide an update on the progress of the preparation of theNational Shipping Policy?
The Ministry of Shipping has drafted a Policy Document and sent to all ministries for
comments.  The policy document is under consideration by the Government.
Paragraph 71 explains that as over 90% of Bangl adesh’s internationally traded goods are carried by
the sea, the provision of efficient maritime transport services, as well as auxiliary services, such as
port services and cargo-handling services, is essential for a cost-effective business environment.  In
paragraph 82 it is pointed out that Bangladesh ’s two ports are administered by autonomous
governmental bodies and that so far there is no fore ign investment in port services as port activities
are managed entirely by the port authorities.  Paragraph 83 goes on to comment that slow cargo
handling has impeded international trade and domestic distribution of goods within the country, thus
hampering Bangladesh’s economic development.  Gi ven this situation, Canada would like to know if
any consideration is being given to liberalization in the area of provision of port services.
Various services e.g. container handling, storage and godown etc. of the Chittagong port will
open for privatization within a year.  It may be mentioned that the government is seriously
considering the possibility of establishment of private ports also.
III., (2), (xiii)  Government procurement, para. 81
What is the intention of Bangladesh with respect to both accession to the WTO Agreement on
Government Procurement and status as  an observer to the Agreement?
Bangladesh has no immediate plans for accession to the WTO Agreement on Government
Procurement.
The following question is based on the Report by the Government (WT/TPR/G/68)
IV., (2)  Product Standardization and Sanitary and Phytosanitary Regulations, para. 19
The TBT agreement calls for the establishment of an "enquiry point".  Does the Bangladesh Standards
and Testing Institute serve this purpose?
Yes, the Bangladesh Standard and Testing Institute served the purpose of the "enquiry point".WT/TPR/M/68
Page 40
The following question is based on both the Report by the Secretariat (WT/TPR/S/68) and the
Report by the Government (WT/TPR/G/68)(WT/TPR/S/68), III., (3), (x)  Export subsidie s and other financial assistance, paras. 109-111
(WT/TPR/G/68), IV., (1)  The Agreement on Subsidies and Countervailing Measures and the
Agreement on Anti-Dumping, para. 16
The Secretariat's Report indicates that direct subsidies are provided to Bangladesh's largest exports -
textiles and garments and more recently to other products.  The total outlay for subsidies and otherfinancial assistance to exporters is projected at Tk 5.61 billion (US$=110 million) for 1999/2000.  In
contrast, the Government Report states that subsid ies are not provided to any export product.  Could
the authorities provide an explanation?
This is not a subsidy proper.  This is just an incentive for the garments exporters to use locally
produced fabrics.  The amount given is less 2% of the value of RMG exports in 1998-99.
UNITED STATES
I., (3), (i)  Taxation and the Government’s revenue base
The Secretariat’s Report notes the heavy dependency on border taxation and its contribution to
domestic inefficiencies and the complexity of tax incentives and duty concessions.  What actions has
Bangladesh taken to address this situation, particularly with respect to the export industry?
The objectives of fiscal policy reforms has been to improve performance of both the revenue
and expenditure side of the budget.  On the revenue side, the objective has been to improve/GDP ratio
in general and the tax/GDP ratio in particular.  On the expenditure side, reforms have aimed at
reducing current expenditures so that development expenditures may be increased.  In 1992 the VAT
was introduced which, along with supplementary duty, replaced the multiple-rated and discriminatory
sales tax on imports and excise tax on domestic goods.  The coverage of VAT has been subsequently
expanded.  The assessment and payment procedures of income tax have been simplified and aself-assessment system has been introduced.  The highest income and corporate tax rates as well as
the number of operative rates have been reduced.  In so far as current expenditures are concerned,
efforts have been made to reduce defense expenditures and subsidies, while increases on account of
wages and salaries have been discouraged.  Fiscal reforms have therefore, aimed at containing the
fiscal deficit and maintaining it at a sustainable level.
I., (3), (ii)  State-owned enterprises and privatization
The large presence of state-owned enterprises appears to create significant inefficiencies, particularly
in essential services that are important to business and investors.  What measures has Bangladesh
undertaken to address this problem?  What is the status of activities to restructure and privatize
SOE’s?
To accelerate the process of denationalization and privatization, the Privatization Board was
established in 1993.  The Board has successfully privatized 18 industries since 1993.  Two other
industries are in a process of privatization.  Six industries are going to be privatized under the 1999
and 2000 privatization programme.  The Privatization Board has recently drafted a Privatization Law
(Privatization Bill, 1999) which is now at the final stage of enactment.  The Draft Privatization Law
has already been approved by the Cabinet and is expected to be placed soon before the Parliament.WT/TPR/M/68
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I., (3), (iv)  Labour market policies
Given ILO obligations to promote the principles concerning core labour standards, what does the
Government of Bangladesh plan to do to remove the prohibition on right of association in export
processing zones?
The matter is being reviewed by the Government.
I., (4), (i)  Composition and pattern of trade
The Report notes Bangladesh’s heavy dependence and vulnerability on the textile and apparel
exports.  What measures has Bangladesh taken to diversify its export base?
Bangladesh has adopted quite a number of measures for diversifying its export base.  These
include:
- Establishment of a Fashion Institute for breaking into the upper end of the garments;
- Providing bonded warehouse facilities for import of raw materials of export oriented
leather industry;
- Providing necessary infrastructure for boosting export of electric and electronic
products (including computer software and data entry services);
- Arranging necessary technical and practical training for creating required human
resources in the export sector;
- Declaring the leather and leather goods, high value RMG items, computer software
and agro-processing sectors as "thrust sectors" for export;
- Rationalizing the incentive structure for the export sector;
- Creation of Export Promotion Fund for meeting the need of the exporters for venture
capital on easy terms;
- Providing incentives for encouraging export of engineering services, consulting
services and civil construction services;  and
- Introduction of a Crash Programme for export development of toys, luggage and
fashion items, electronics and leather goods; diamond cutting and polishing;
jewellery; silk fabrics; stationery items; cut and artificial flowers and orchids; gift
items; vegetables and engineering consultancy services.
II., (4), (i)  World Trade Organization
The Report indicates in 1996 Bangladesh established a study project to identify and implement
necessary changes to bring Bangladesh in compliance with its WTO obligations, but also notes
Bangladesh’s difficulty in meeting notification obligations.  How does this study relate to the analyses
discussed in the annex regarding technical assistance?
The Secretariat’s Report notes that Bangladesh has steadily liberalized its trade regime and has a
comparatively open environment for Foreign Direct Investment.  However, this is not reflected in
Bangladesh’s GATS schedule, which only inscribed existing policies in Basic Telecommunications
Services and in a tourism subsector, Five Star Hotel and Lodging Services.  Does the Government of
Bangladesh intend to actively participate in the GATS 2000 negotiations?  When will Bangladesh
schedule broader commitments in the services schedule to keep pace with ongoing reforms andinvestment liberalization?
Bangladesh's difficulties in meeting notification obligations have been discussed earlier.WT/TPR/M/68
Page 42
Bangladesh does intend to actively participate in future GATS negotiations.  Broadening of
Bangladesh's services schedule would depend on reciprocity of her trading partners andimplementation of S&D provisions in other sectors.
II., (4), (ii)  Regional obligations
When will Bangladesh notify the WTO of its tariff concessions under the SAFTA?
SAFTA has not yet been negotiated.  It is our understanding the tariff schedules agreed in the
SAFTA negotiations was notified by India some years back when that country was holding therotating Chair of SAPTA.
II., Annex II.1:  Trade-related aspects of technical assistance
This section of the Secretariat’s report provides a very useful summary of the technical assistance
needs in Bangladesh.  Further detail regarding how the Integrated Framework is being used to meet
those needs would be very useful.  In what areas has assistance already been provided and where isfurther action necessary?
Has Bangladesh made available to WTO Members the document “Trade-related Technical Assistance
Projects for Bangladesh”?
To the best of our knowledge, no trade-related technical assistance has so far been received
under the Integrated Framework.  The document on Trade-related Technical Assistance Projects forBangladesh was made available to the donor agencies and countries which attended the RTM in
Dhaka.  The documents was also made available to WTO and UNCTAD.
III., (2), (i) Registration and Documentation
The Report by the Secretariat indicates in paragraph 1 of III.(2)(vii) that import licences are not
required, but that requirements exist that implicitly  impose import licensing on the goods listed in
Table III.1.  What justification does Bangladesh have for maintaining such implicit import licensing
requirements?  Please describe your plans to rationalize import licensing requirements.  Are thereany similar requirements that apply to goods that are not listed in Table III.1?
Import of goods listed in Table III.I are restri cted, mainly on health and security ground.  This
restriction should not be viewed as imposing import licensing in an implicit form.  Similar
requirement are not applicable to goods that not listed in Table III.I.
Is the Import Registration Certificate (IRC) an im port licence?  If so, does GOB consider the
IRC to be an automatic or non-automatic licence?
The Import Registration Certificate (IRC) is not an import licence.
Bangladesh has accepted obligations to notify new licensing procedures or changes in these
procedures to the Committee on Import Licensing.  What is the specific nature of the difficulty in
providing notification regarding import licensing?  What plans does Bangladesh have to improve itscompliance with the notification requiremen ts of the Agreement on Import Licensing?
Bangladesh's Import Control regime is in fu ll compliance with the provisions of the
Agreement on Import Licensing.  The rules for import control are neutrally application and
administered in a fair and equitable manner.  These are set for five years and published in theWT/TPR/M/68
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officially gazette.  Bangladesh has already notified the WTO of its import control regime and has
made copies of the current Import Policy Order 1997-2002 available to the WTO Secretariat.
III., (2), (ii), (a)  Customs valuation
The Report notes Bangladesh was obliged to implement the Agreement on Customs Valuation on
1 January 2000.  Please describe Bangladesh’s efforts to meet these deadlines and the status of its
implementation of the Agreement, including the elimination of minimum import prices.
Bangladesh has already implemented the Agreement on Customs Valuation on
15 February 2000.  She has already abolished tariff values (minimum import price) on all items except
Petroleum products, i.e. Motor Spirit and diesel, the import which is permissible only by the
Bangladesh Petroleum Corporation.
III.  Trade Policies and Practices by Measure,  (2), (ii), (b)  Preshipment inspection
Please indicate when Bangladesh intends to provide a notification under the WTO Agreement on
Preshipment Inspection.
A mandatory PSI system has been introduced from 15 February 2000 for three years at the
moment.  If required, the system will be extended for further period and eventually it will be faced out
completely.
III., (2), (iv)  Tariffs
Bangladesh is to be commended for reducing its applied tariff rates and the number of tariff bands.
However, the Report notes that the tariff structure continues to create uncertainty due to the use of
multiple rates at the HS 4-digit level.  How does Bangladesh intend to address this problem?  Please
describe any current activities towards additional tariff reform and simplification.
Bangladesh has launched a three year Customs Administration Modernisation (CAM) project
for making recommendations about tariff reforms and simplification.
The Report also notes that Bangladesh has bound only 831 tariff lines in its non-agricultural
schedule.  Despite movement towards lowering applied rates, the lack of bindings creates uncertainty
among traders.  We suggest that Bangladesh consider expanding its tariff bindings and bring them
closer in line with applied rates.
Bangladesh has no plan at the moment to bring any changes in the bound rates.
Please confirm that the tariff concessions described in paragraph 38 are offered on a
non-discriminatory basis.  Are there any restrictions on who may register for these concessions?
Bangladesh requests for more time to answer this question.
Please describe what measures are being taken to eliminate the tariff concessions for 100%
export-oriented industries.
Bangladesh does not intend to eliminate the tariff concessions for 100% export-oriented
industries at this very moment.WT/TPR/M/68
Page 44
III., (2), (v)  Other border charges and levies
The Report indicates the temporary nature of the 2.5% infrastructure development charge.  When
does Bangladesh intend to eliminate this fee?
Infrastructure development surcharge is temporary in nature.  The Government cannot exactly
announced the date of its elimination.  However, the temporary character of the surcharge indicates
that it will not continue for any extended period of time.
GATT Article VIII requires that fees for service be limited in cost to the services rendered.  How does
Bangladesh justify the 2.5% Letter of Credit/Import Permit fee, particularly for higher priced
imports?
Has Bangladesh bound its tariffs on any of the products that are also subject to a supplementary
tariff?  If so, which ones?
A number of consumer goods and some dur able consumer goods/producers goods are
exempted from supplementary duty.  In the cases where there are supplementary duty along with
customs duty, the two together will not exceed the bound rate.
III., (2), (vi)  Import prohibitions and restrictions
We look forward to discussing in the Balance of Payments Committee Bangladesh’s BOP restrictions,
particularly those on textiles and apparel.  What is the justification for the import ban or prohibitionon products not covered by the BOP restriction, particularly on the agricultural products indicated in
paragraph 38?
The justification for import ban or prohibition on agricultural products (like chicks, eggs,
tendu leaves, sugar, salt), packing materials and textile products is to protect domestic producers.
III., (2)  Product Standardization and SPS Regulations
We welcome the steps taken by Bangladesh to im plement the TBT Agreement, including the adoption
and notification of the Code of Good Practice of th e TBT Agreement.  Please describe what efforts
Bangladesh has undertaken to meet the TBT Agreem ent's obligation to notify the TBT Committee, as
required under Article 15.2, of "…measures in existence or taken to ensure the implementation and
administration of the Agreement...".
Does Bangladesh need more information on what is required for this notification and/or is
Bangladesh having difficulties in establishing a system within its government for overseeing
implementation and compliance with the Agreement?
Please describe what efforts Bangladesh has und ertaken to meet the TBT Agreement’s obligation to
establish an enquiry point.
A contract point of the TBT agreement has been established in the BSTI.  The BSTI will
notify very shortly regarding the means in existe nce or taken to ensure the implementation and
administration of the TBT agreement in Bangladesh.
The TSTI has some limitations with respect to overseeing implementation and compliance
with the agreement.  It is to identify the c onstraints and communicate the same to the WTO soon.WT/TPR/M/68
Page 45
III., (2), (xiii)  Government procurement
Given the significant amount of  imports that are purchased by government agencies and SOE’s it is
important to have transparent procedures for participating in government tenders.  What is the status
of developing a standardized format for government procurement?  Has Bangladesh sought technical
assistance in this area?
The Department of Supply and Inspection ha s developed a 'Purchase Manual' which lays
down procedural rules and transparency requirements.  Since different Ministries and GovernmentAgencies follow this purchase manual in their procurements, the procurement procedures are very
similar for different Ministries and Government organizations.  However, different government
organizations have the freedom to decide whether to use open or selective tendering.  There is yet no
specific plan to developed a standardized format for government procurement.  Bangladesh has not
sought technical assistance in this area.
III., (3), (xii)  Tax concessions
Regarding Bangladesh’s Income Tax Ordinance, what amount of funds are rebated to exporters.
When does Bangladesh intend to notify this program to the WTO?
It is not yet certain.
III., (3), (xv)  Export finance
Please explain why the measure of setting the interest rate bands in the range of 8% to 10% has not
been notified to the WTO.
Weaknesses in the areas of human resources and institutional capacity have delayed
Notification of the WTO regarding the setting of interest rate bands in the range of 8% to 10%.
III., (3), (xvii)  Export promotion and marketing assistance
Please explain the “Crash Programme” in detail, specifically duration, amount of funds, and eligible
recipients.  When does Bangladesh intend to provide notification to the WTO?
Special focus is paid on the promotion of export items placed under the "Crash Program".
these items include toys, luggage items, fashion items, electronics, leather goods, diamond cutting and
polishing, jewelry, silk fabrics, stationery goods, cut and artificial flower, orchid, gift items,
vegetables, etc.  Bangladesh will notify th e WTO about the Crash program in due time.
III., (4), (iv)  Interest rate subsidies
Please explain when the interest rate subsidies measure will be notified to the WTO.
Interest rates subsidies measure will be notified to the WTO in due time.
III., (4), (ix)  Trade-related intellectual property rights
What is the status of the new Trade Mark Act mentioned in the Report?
The Trade Marks Act 1940 has been amendment by the Trade Marks rules, 1963.  This is
presently been examined by the Government.WT/TPR/M/68
Page 46
Is Bangladesh receiving adequate technical assistanc e in order to prepare for implementation of its
TRIPS obligations and enforcemen t mechanisms?  Please describe any areas where Bangladesh seeks
greater assistance.
No, Bangladesh is not receiving adequate technical assistance in order to prepare
implementation of its TRIPS obligations and enforcement mechanism.  Areas where Bangladesh
seeks greater assistance have been identified in the document "Trade-Related Technical Assistance
Projects".
IV., (4)  Energy
We welcome the Government of Bangladesh’s decisi on to open the gas and power sectors to private
domestic and foreign investment, which is intende d to stimulate domestic production and exports.
Does the Government of Bangladesh plan to participate in the development of a category for the
energy services sector in the current round of GATS 2000 negotiations?
The Government is reviewing the issue at the moment.
IV., (5), (ii)  Textiles and clothing
Comment:  Paragraph 38 indicates that the growth rate on the 21 quota items is 7%.  This is
incorrect.  As agreed in the Uruguay Round, the current U.S. growth rate for Bangladesh is 10.15%
and will increase to 12.89% in 2002.
Yes, the current U.S. growth for Bangladesh quota items is 10.15% and this is likely to
increase to 12.89% in 202.
IV., (6), (i)  Financial services
We expect Bangladesh to undertake GATS commitments in financial services.  Liberalization of
financial services will help strengthen Bangladesh’s infrastructure for trade in goods and services.
Bangladesh will decide later whether to undertake GATS commitments in Financial Services.
IV., (6), (i), (a)  Banking services
The Secretariat’s Report indicates that the four  nationalized commercial banks (NCB’s) dominate a
banking sector characterized as weak and unsound.  Th e Report also cites indications that the NCB’s
are not subject to adequate regulatory oversight which is the purview of the Ministry of Finance
rather than the Bangladesh Bank.  Please describe what steps are being taken to remedy this
situation.  Does the Government of Bangladesh plan to restructure and privatize the NCB’s?
The Report also notes that licensing approval to open a branch office is subject to reciprocity
arrangements between Bangladesh and the host countr y of the foreign bank.  Please describe the
scope and rationale of this requirement.
Please verify that foreign banks may open and operate branch offices to conduct business other than
trade financing.
Administrative regulation of the NCBs e.g. formulation of administrative policy, appointment
of general managers and officers of higher positions, appointment of the members and chairmen of
the Board of Directors etc. are done by the Ministry of Finance.  Whereas the business regulations are
conducted in accordance with the Bank Company Act 19091 and policies formulated by theWT/TPR/M/68
Page 47
Bangladesh Bank.  Bangladesh Bank also does the supervisory role by means of inspecting the
various banks.
Bangladesh is making efforts to restructure the NCBs, but there is no immediate plan towards
privatization of these banks.
IV., (6), (i), (b)  Insurance services
The Secretariat’s Report indicates that Cabinet approval is necessary for the issuance of a licence to
provide insurance services.  Please explain the purpose and rationale for this requirement.  Why is italso necessary to acquire a separate licence to open each new branch?
The Report notes that the Central Rating Committee under the Chief Controller of Insurance (CCI)
sets all premiums in the sector and must grant approval for the introduction of, inter alia, new
products, rates, terms, conditions and policy format s.  Please explain the rationale for these
regulations?  Are they prudential in nature?  They would seem to impede the efficient operation of the
sector.  Also, please describe how premium rates are calculated.
What is the rationale for requiring that 50% of all reinsurance be conducted through the state
provider?  When will this requirement be lifted?
Licence for floating new insurance company is issued by the Chief Controller of Insurance to
a Public Limited Company which satisfies certain criterion such as sponsors' qualification prescribedby the Insurance Act & Insurance Rules.  The issue of licence is done in two stages.  Before filing
registration application, the proposed insurer is required to obtain a prior permission from the
Government after submitting details of the sponsors, share of each sponsor to the capital etc. in the
prescribed form.  This application is submitted through the Chief Controller of Insurance who
scrutinizes the application in the light of the Insurance Act and Rules and submits its recommendation
to the Ministry of Commerce submits it recommendation to a Cabinet Committee constituted for the
purpose of permitting new bank and insurance company. The reason for this requirement is to ensuremore prudent decision from the point of view of national interest.
The permission to open new branch is given by the Chief Controller of Insurance.  This is
required only to scrutinize the economic feasibility of opening new branch.
The practice of determination of premium rates by the Sadharan Bima Corporation (SBC)
continued even after allowing public limited companies to do insurance business side by side with theSBC.  After a good number of private companies came into being the formed and association and
proposed to the Government that the premium rate and other related condition be prescribed by the
Association.  The SBC on the other hand submitted to the Government that they should be allowed to
continue the old practice as they are the re-insurer.  The Government after hearing both the parties
introduced a new section in Insurance Act in the following terms:
"The Chief Controller of Insurance shall, at in terval of not less than one year, determine, in
consultation with the insurers carrying on general insurance business, the rate of premium for such
insurance business."
The intention behind this was to take a decision centrally to avoid cut-throat competition
among the insurers.  The committee has been devised as a means of consultation by the controllerwith the insurer.WT/TPR/M/68
Page 48
IV., (6), (ii)  Telecommunications services
In its WTO Schedule on Basic Telecommunications Services, Bangladesh indicated it would consider
making commitments on regulatory disciplines upon the passage of new legislation.  A
Telecommunications Act establishing a new independent  regulator has been before the Cabinet since
September 1999.  When do you anticipate that such legislation will be enacted, and will Bangladesh
then promptly attach regulatory commitments to its existing WTO Schedule?
The legislation will hopefully be enacted soon.
INDIA
We request clarification whether Bangladesh ha s started applying the Ag reement on Implementation
of Article VII of the GATT 1994 (Customs Valuation Agreement) at the end of its transition period for
delayed application in January 2000.
The Agreement of Customs Valuation has already been implemented from 15 February 2000.
REPUBLIC OF KOREA
Bangladesh Tariff Commission
According to paragraph 8 of page 15 of the Secretariat’s Report, the BTC investigates allegations of
dumping and makes recommendations to the government for the levying of anti-dumping and
countervailing duties.  Is the government expected to adopt these recommendations from BTC?, i.e.,
does the government have the obligation to accept  them?  How does the government reflect these
recommendations from BTC in the policy?  Does the government have any leeway to modify these
recommendations?
The Government usually adopts recommendations made by the BTC.  The Government may
modify these recommendations if it so desires.
WTO commitments
Paragraph 22, page 20 of the Secretariat’s Report mentions that Bangladesh has found it difficult to
implement WTO commitments.  What is the most difficult commitment to implement?  What could be
the desirable solution to remedy this situation?
It is difficult to say which is the most diff icult WTO commitment to implement.  Technical
assistance to develop human resources and institutional capacity would be desirable solution to
remedy the situation.
General System of Preference
According to paragraph 34, page 22 of the Secretariat’s Report, “stringent rules of origin criteria
and procedural complexities make it difficult for Bangladesh to derive benefits under GSP schemes.”
Could Bangladesh provide a few examples of such criteria and complexities and suggest options to
help countries such as Bangladesh reap greater benefits from the GSP?
The "three stage transformation/conversion" Rule of Origin which is applied by the EU in
administering its GSP scheme is a good example.  To help countries such as Bangladesh to reapWT/TPR/M/68
Page 49
greater benefits from the GSP, the GSP-providing countries can relax Rules of Origin criteria and
simplified related procedures.
Bilateral investment treaties  (p. 24, para. 42)
Explain how much FDI has increased from those countries that Bangladesh concluded BIT with.
Bangladesh requests for more time to answer this question.
Export promotion
On page 26 of Annex II of the Report, the Secretariat writes that “since most of the export-oriented
enterprises in Bangladesh are small and medium size, they face the difficulties due to limited capacity
to undertake market research, to make investment in technology adaptation and to collect trade
information.”  To overcome similar problems in the past, Korea established institutions for trade
promotion such as the Korea Trade-Investment  Promotion Agency (KOTRA) to supply valuable
foreign trade information.  Does Bangladesh have similar institutions?  If no such institutions exist, isthe Bangladeshi government planning to establish one?
The Export Promotion Bureau is the government organization responsible for trade promotion
in Bangladesh.
Tariffs
The Secretariat Report highlights in paragraph 30, page 38 that 13.2% of Bangladesh’s tariff lines
are bound.  It appears that the average industrial tariff is bound at 50%, which is rather high.  Is it
reasonable to expect that such high tariff rates would be markedly reduced with a new trade round?
Also, Korean exporters have complained that, on top of tariffs, a number of taxes hinder trade.  Such
taxes take the form of infrastructure developm ent tax (2.5%), licence tax (2.5%), VAT (15%) and a
special consumption tax that can reach 350%.  Decr easing the overall incidence of such taxes would
certainly enhance trade, benefiting local and foreign producers alike.
The Government has no intention to reduce bound tariff rates for industrial goods.
Government procurement
In paragraph 78, pages 54-55 of the Report, the Secretariat refers to the “Purchase Manual” for
government procurement which describes procedural rules and transparency requirements.  The
Secretariat mentions that the Bangladeshi Government is currently planning to develop a
standardized format for governmen t procurement.  Does the Government of Bangladesh intend to
impose the contents of the Purchase Manual and standardized format on the procuring entities as
legal obligations?
We understand that the fire engine procurement legislation of the Bangladeshi Ministry of Home
Affairs limits foreign participation in tendering procedures to the US, Japan, EU and Australia.  What
is the basis for such limits?  Korea wishes that tenders be open to all countries and not simply to four.
Are there legal or administrative procedures that foreign companies can resort to should they feel
discriminated against in a tender?  If so, we would appreciated it if Bangladesh provide details on
such procedures.
Bangladesh requests for more time to answer these questions.WT/TPR/M/68
Page 50
Others
- Arbitrations
Bangladesh is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, a convention it signed in August 1992.  Ho wever, a local company in Bangladesh is allowed
to sue another party (foreign) in a local court even  after an arbitration took place between these two
parties, seemingly to annul the result of this arbi tration, which the local company presumably deemed
unfavourable.  Korea hopes that Bangladesh can duly honour the outcome of an arbitration andrefrain from allowing unnecessary lawsuits for matters already settled by arbitrations.
- Letters of credit
The international practice concerning letters of credit is that banks will give their verdict,
accompanied by a justification, on such letter within one week. Bangladeshi banks, however, often
take more than 30 days before notifying their decision.  This undue delay constitute a trade barrierand Korea urges Bangladesh to require its banks to follow international practice on this matter.
- Money transfers
It appears that foreign freight companies are allowe d to request a money transfer every four months –
on a quarterly basis.  And once the request is submitted, it takes between six and eight weeks to
receive final approval from the Bangladeshi central  bank.  Korea hopes that such procedures can be
improved to expedite money transfers.
- Customs Clearance  (pp. 31-35, paras. 8-17)
It appears that procedural complexities including burdensome documentation increase the cost of
imports.  This, compounded with delays in cust oms clearance (on average 12 days, but may take as
long as 30 days) and duplications (40 different signatures (or stamps) are needed) are considerable
impediments to trade.  As it seems that custom s procedures could be streamlined and simplified,
Korea wonders whether the Bangladeshi Government is contemplating a general overhaul of suchprocedures so to lower the costs of imports and facilitate trade.
Import restrictions
In paragraph 57, page 50, the Secretariat refers to restrictions imposed on the import of certain
textile and agricultural goods.  Korea would appreciate it if Bangladesh could explain how such
restrictions are compatible with WTO disciplines.  Do they refer to GATT Article XVIII (GovernmentAssistance to Economic Development) Section C (D evelopment Promotion of a Particular Industry)?
Privatization  (p. 79, para. 177)
A number of SOEs have been privatized in the recent years and it appears that many others will be in
the future.  What is the foreign investment share in the privatization process?  Is there any special
programme to induce foreign investment in the privatization process?  In general, has foreignparticipation in privatization been positive?
Bangladesh requests for more time to answer these questions.
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