[CTC] Bangladesh Weights Pros and Cons of Joining TPP (Sourcing Journal, 3/28/16)

[Adam Weissman]

  Sourcing Journal <https://sourcingjournalonline.com/>



  Bangladesh Weighs Pros and Cons of Joining TPP

by Tara Donaldson
Posted on March 28, 2016inTrade 
<https://sourcingjournalonline.com/category/trade/>

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Area of Dhaka, the Capital of Bangladesh 
<https://sourcingjournalonline.com/wp-content/uploads/2015/08/DhakaBangladesh.jpg>Area 
of Dhaka, the Capital of Bangladesh

Not that Bangladesh is eligible to join the Trans-Pacific Partnership 
(TPP), since it’s still in the dog house with the United States for its 
labor standards, but the Southeast Asian nation has already begun 
mulling the benefits and setbacks the 12-nation trade deal could bring.

A study by the Bangladesh Tariff Commission (BTC) said the country is 
neither in a position to join the TPP, nor does it need to do so.

Bangladesh Ministry of Commerce senior secretary Hedayetullah Al Mamoon 
told the Financial Express, “We have been examining all aspects. We will 
take a decision on joining the TPP once it appears necessary for us.”

Currently, Bangladesh has tariff-free access to most of the TPP member 
markets under its least developed country (LDC) status, with the 
exception of the U.S., which suspended its trade benefits under the 
Generalized System of Preferences (GSP) in June 2013 and so far has not 
yet deemed the country fit for reinstatement.

Australia, Canada, Japan, Singapore and New Zealand are among the TPP 
member countries that afford Bangladeshi products tariff-free market 
access, so joining the TPP would not have far-reaching benefits in that 
regard.

The BTC believes that joining the TPP would mean a decline in revenue 
from import duties because, as a member of the bloc, Bangladesh would 
have to reciprocate the duty breaks for partner countries.

Taking Singapore and Japan in particular—which together provided 10 
percent of Bangladesh’s imports in 2015—earnings from duties could drop 
quite a bit. Currently, import duties account for roughly 27 percent of 
Bangladesh’s total revenue earnings, according to the Financial Express.

For now, the country is keeping an eye on Vietnam and the forthcoming 
future competition it will face from the nation expected to benefit the 
most from the TPP trade deal.

Both Bangladesh and Vietnam saw the biggest growth in apparel exports to 
the U.S. in January, with Bangladesh’s growth coming in at 11.4% to $498 
million and Vietnam exporting $926 million in apparel to the U.S. in the 
month, a 16.5% jump.

But with Vietnam’s membership in the TPP, the country could soon give 
Bangladesh an even bigger run for its exports. Vietnam already pays a 
lower average duty on apparel destined for the U.S. than Bangladesh, and 
with those duties being overwhelmingly reduced or eliminated once TPP 
takes effect, Bangladesh will be at a further disadvantage.

All that aside, Bangladesh knows its musings about joining the TPP, at 
this stage, are just that.

“Right now, Bangladesh is not able to join the TPP bloc,” Centre for 
Policy Dialogue executive director Mustafizur Rahman told the Financial 
Express. “We need to improve our standards including addressing the 
labor issue before joining the bloc.”

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