Country risks trade deals amid limited defence mechanisms

Bangladesh is moving to sign multiple trade deals, including Preferential Trade Agreements (PTAs), Free-Trade Agreements (FTAs), and Economic Partnership Agreements (EPAs), without sufficient preparation to protect its domestic industries through robust trade-defence mechanisms, sources say.

The government is in talks with several countries on trade deals, while its EPA with Japan is in the final stage.

Experts and industry stakeholders warn that the country's limited institutional capacity could leave local businesses vulnerable to unfair trade practices such as dumping and subsidies.

The Bangladesh Trade and Tariff Commission (BTTC) operates a trade defence desk with only five officials, one of whom is currently on leave. Since its establishment, the desk has not received any formal applications from private sector firms seeking protection.

Meanwhile, Bangladesh continues to face anti-dumping duties on exports, including India's duties on jute and Pakistan's duties on hydrogen peroxide.

Dr Mostafa Abid Khan, former member of BTTC, told The Financial Express that while the government maintains a trade defence desk, the private sector has yet to initiate applications.

"The industry must come forward first," he said. "To impose anti-dumping duties, a detailed application of over 100 pages, supported by evidence, is required. Only then can the government take action."

Local entrepreneurs have repeatedly raised concerns about Indian textile exporters allegedly dumping yarn in Bangladesh at prices below those in the Indian domestic market.

AKM Alamgir Hussain, head of Commercial at Partex Gypsum Board, said his company invested nearly Tk 3,000 million in a gypsum factory employing 3,000 people.

"We are facing survival challenges due to the dumping of finished gypsum from India, Thailand, and China. We submitted a formal application to the Tariff Commission nearly two months ago," he added.

Commerce ministry officials emphasised that while FTAs and other trade deals reduce barriers, they can create pressure on domestic industries by requiring tariff and quota cuts. Protection clauses, such as anti-dumping and safeguard measures, are crucial to shield vulnerable sectors.

Lower tariffs may make local products less competitive against subsidised imports, highlighting the need for a balanced approach that combines liberalisation with targeted protection. The country's tariff policy stipulates that "if the interests of domestic industries are harmed due to imports, appropriate protection will be provided under anti-dumping, countervailing, and safeguard duty regulations."

However, the government's Smooth Transition Strategy (STS) does not mention trade defence, focusing instead on export diversification, improving business climate, and enhancing facilities like the National Single Window.

Prof Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), noted that Bangladesh must take strategic initiatives to protect local industries while adhering to WTO limits.

"As an LDC, Bangladesh cannot impose duties above bound rates," he said. "The country needs to strengthen institutional capacity and skilled manpower because trade defence cases are expected to rise."

Abul Kasem Khan, chairperson of the Business Initiative Leading Development (BUILD), warned that dumping poses a serious challenge to local industries. "We are moving towards signing several trade deals, but we are lagging in trade negotiations due to a lack of experts," he said.

He urged the government to integrate experienced professionals and develop in-house expertise within trade institutions.

At a recent workshop on strengthening institutional capacity, Hafizur Rahman, former administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), called for urgent action to bolster trade defence mechanisms ahead of Bangladesh's post-LDC graduation.

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