Leaders of major trade bodies and business chambers on Thursday sought extension of the time for LDC graduation of the country for three to five years to take preparation as they faced difficulties from the volatile economic conditions over the last few years.
The businesses said that they were struggling from the severe fallouts of Covid-19, Russia 鈥揢kraine war, higher global inflation, higher bank interest rate, July-August political turmoil of the last year, higher cost of production and latest the higher tariff imposed by the Trump administration.
So, this is not the time for the smooth graduation and the graduation should be deferred three to five years, the businesses said at a seminar on LDC Graduation: Some options for Bangladesh holding at a local Hotel in Dhaka organised by International Chamber of Commerce -Bangladesh (ICC-B) in collaboration with Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Association of Pharmaceuticals Industries (BAPI).
Private sector entrepreneurs, traders, economists, exporters, importers, trade body leaders, business chamber leaders and researchers participated in the seminar.
The businesses also demanded for a draft of application to be signed by different trade bodies and business chambers to submit to Chief Adviser Professor Muhammad Yunus for deferring the LDC graduation of the country.
The businessmen also demanded the government for signing Free Trade Agreements (FTAs) and other trade deals with major trading partners soon to retain the preferential trade benefit even after the LDC graduation.
While moderating the seminar ICC-B president Mahbubur Rahman said graduation will mean loss of duty-free market access in the EU, UK, and other destinations, with tariffs potentially rising to 12 percent 鈥� reducing exports by 6-14 percent unless GSP+ or similar arrangements are secured.
Businesses are calling for a three to five-years extension, the ICC-B president also said.
Rahman also said the LDC graduation means the end of WTO special benefits - from export subsidies to relaxed intellectual property rules for generics, stricter rules of origin, raising production costs in apparel and other sectors and reduced concessional finance, replaced by costlier loans with tighter terms.
鈥楾oday鈥檚 question is not whether we graduate 鈥� that is settled. The challenge is how we graduate successfully,鈥� he said. The ICC-B President said that means defending market access, building competitiveness and acting with urgency, not just planning.
In her keynote presentation, Sanya Reid Smith, legal advisor and senior researcher of The Third World Network (TWN), said about the possible impacts of Bangladesh鈥檚 LDC graduation.
Smith said once Bangladesh graduates, it must comply with the WTO鈥檚 intellectual property (IP) rules (TRIPS) including 20 year patents on new medicines delaying market entry of generics.
If it were a new medicine after Bangladesh graduates, insulin prices in Bangladesh could be 11 times more expensive so 鈥榯he poverty rate among households needing insulin could increase by between 15 and 200 percent鈥� the patented version of medicines to treat AIDS cost US$15,000 per patient per year, but the generic version only costs $61 per patient per year.
The patented medicines can be 1,044 percent more expensive than their generic equivalents in Malaysia, Smith also said.
She also mentioned that Angola should have graduated in 2018, but it delayed it then in 2024 no longer met the graduation criteria so no date is currently set for its graduation.
Similarly, Timor Leste should have graduated in 2021 but no date has been set for its graduation and Myanmar should have graduated in 2024, but no date has been set for its graduation, Smith said.
Because of the graduation Bangladesh will also face reduction in preferential export market access such as the EU is Bangladesh鈥檚 largest export market (48 percent of Bangladesh鈥檚 exports go to the EU) and for about 93 percent of Bangladesh鈥檚 exports to the EU which currently enter the EU with 0 tariffs while Bangladesh is an LDC, she also said.
Syed Nasim Manzur, president of Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB), said the LDC graduation at this time will be a suicidal decision as the domestic economy witnessed an unprecedented shock. It would be throwing away the advantage to other countries, Manzur also said.
ICC-B vice-president AK Azad said the reserve of gas is depleting soon and Bangladesh will have to spend $4-$5 billion for importing gas in next few years to ensure energy security. He called the businesses to be united soon and send a letter to Chief Adviser of interim government Professor Muhammad Yunus for deferment of the LDC graduation.
BAPI president Abdul Muktadir said over the last six years the business was affected by many things such as Covid-19, currency flights, high bank interest rate. So Bangladesh needs another six years of deferment of the LDC graduation. 鈥楲et us have consensus and work together,鈥� he said.
鈥榃e are in mindset that we are graduated, but we need more time as Bangladesh will have to compete with some other countries such as Vietnam, Cambodia and India,鈥� said BGMEA President Mahmud Hasan Khan.
Naser Ezaz Bijoy, vice-president, ICC Bangladesh聽 and chief executive officer, Standard Chartered Bank; Taskeen Ahmed, President, Dhaka Chamber of Commerce and Industry (DCCI); Abdul Hai Sarker, president of Bangladesh Association of Banks; Fahmida Khatun, executive director of Centre for Policy Dialogue, Masrur Reaz, chairman of Policy Exchange, Bangladesh; Selim Raihan, executive director of South Asian Network on Economic Modeling, Zaidi Sattar, chairman and chief executive Policy Research Institute of Bangladesh and Naser Ezaz Bijoy, ICC-B vice-president also spoke.
ICCB executive board members Simeen Rahman, CEO, Transcom Group and director, Transcom Limited; Md Fazlul Hoque, managing director, Plummy Fashions Limited; Syed Ershad Ahmed, president, American Chamber of Commerce in Bangladesh (AmCham); ICCB secretary general Ataur Rahman; Kaiser Kabir, CEO and managing director, RENETA PLC; Md Rezwan Selim, vice-president, BGMEA; Asif A. Chowdhury, managing director, Bay聽 Consolidation Ltd.; Rasheed聽 Mymunul Islam,聽 managing director, Monno Ceramic Ind Ltd; Minhaj Ahmed, Ahmed Food Products (Pvt) Ltd; Tanvir Ahmed , managing director,聽 Sheltech Ceramics Limited; Mohd Arshad Ali, managing director, The Merchants Limited; RafidulHaq, managing director and CEO, General Group; Mojibul Islam, managing director, Amic Pharma; M Mohibuz Zaman, managing director and CEO, ACI聽 Healthcare Ltd; Sheikh Mohammad Maroof, managing director, Dhaka Bank PLC were also present among others.
