India wants trade remedial deal with Bangladesh, excluding countervailing measures

India is interested to sign a deal with Bangladesh on trade remedial method, but wants to exclude 'countervailing measures' from the proposed pact, according to officials.

The two sides have agreed to ink a memorandum of understanding (MoU) for establishment of a framework of cooperation in the area of trade remedial measures and they already exchanged a draft.

However, recently the Indian side sought an amendment to the draft MoU, where it wanted that disputes over subsidies and countervailing measures continue to be resolved through consultations under the World Trade Organisation (WTO) rules and the South Asian Free Trade Area (SAFTA) agreement, instead of the proposed pact.

Officials said alongside tariff, para-tariff and non-tariff barriers, the countervailing measures imposed by India are also major concerns for Bangladeshi traders.

They said presently Bangladesh is negotiating with India on countervailing duties, slapped on several goods by the latter, and these negotiations are taking place under the WTO Rules.

Negotiating countervailing measures under a bilateral pact may produce quicker results than that under multilateral pacts, they opined.

"Signing a trade dispute remedial deal with India excluding the issue of countervailing measures would not be that much beneficial for Bangladesh," noted a trade official.

He also said the Ministry of Commerce will soon write to India, expressing its disagreement with the proposed clause of the draft MoU.

Presently, Indian anti-dumping duty is applicable to export of at least three Bangladeshi items - jute goods, hydrogen peroxide, and fishing net.

The neighbouring giant turned down a plea of Bangladesh to withdraw the anti-dumping duty in the bilateral commerce secretary-level meeting, held in New Delhi in mid-January this year.

India slapped the anti-dumping duty on Bangladesh's jute yarn, hessian and bags, ranging between US$19 and $352 per tonne, in January 2017.

A similar duty, ranging between $27.81 and $91.47 per tonne, was also imposed on export of hydrogen peroxide to India from Bangladesh in April 2017.

In 2018, India also put anti-dumping duty, $2.69 per kilogramme, on fishing net, exported from Bangladesh to its domestic market.

Research Director of Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem told the FE that the least developed countries (LDC) enjoy specific flexibility under the WTO's agreement on subsidies and countervailing measures.

He said as a poor nation Bangladesh should continue applying its LDC status. "Being a graduated LDC, perhaps after 2024, Bangladesh would continue enjoying the similar flexibility under the WTO's agreement for a specific time period."

"In this context, Bangladesh need not rush for signing an agreement with India at this stage; rather it should wait to see how the WTO provisions are applicable after its graduation."

At present, India is dealing with disputes related with subsidies and countervailing measures under the WTO agreement concerned, and Bangladesh should follow the same, he suggested.

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