Bangladesh will reaffirm its proposal for amendments to the D8 Preferential Trade Agreement seeking a 30-percent local value addition criterion for least developed countries on availing preferential trade benefits at today’s meeting of the supervisory committee of the D-8 PTA.
The sixth meeting of the committee will be held virtually on Tuesday aimed at finding ways for full implementation of the PTA through minimising differences in opinion on various issues, including Bangladesh’s proposal on minimum value addition, among member states.
Eight member states of the D-8 Organisation for Economic Cooperation signed the D-8 PTA on May 13, 2006 to boost trade among the members — Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.
The PTA that came into effect on August 25, 2011 is yet to be fully implemented due to differences in opinion among the nations although all countries, except for Egypt, have ratified the agreement.
Initially, the countries agreed to implement the PTA in July 2016.
Later, the members set March 2019 as the new cut-off date for full implementation of the agreement.
So far, only Malaysia, Turkey and Iran have implemented the PTA through deposition of an official Gazette notice to the D-8 secretariat.
According to the concept note of the upcoming meeting, Indonesia is completing its internal procedures to start implementation while Nigeria and Pakistan are ready to implement but will move for full implementation once the issue related to Bangladesh’s request on value addition criterion is resolved.
Bangladesh ratified the agreement in 2017 on the condition of 40 per cent local value addition under the rules of origin to avail the preferential trade benefits.
But since the beginning, Bangladesh, the lone LDC country in the D-8 established in 1997, has been demanding a reduction in the value addition criteria for the LDCs.
Commerce ministry officials said that Bangladesh would again place its demand at the Tuesday meeting and try to convince the member states to agree to the proposal.
According to the D-8 secretariat, Iran, Malaysia and Nigeria support the Bangladesh’s proposal while Turkey and Indonesia opine that the requested amendment will require a new round of ratifications which will take longer than the time needed for Bangladesh to graduate from its LDC status.
Officials said that Bangladesh would also request revision of offer lists for trade reduction and issuance of customs notifications under the PTA at the meeting so that the issues can be resolved before the upcoming D-8 Summit that might be held in March or April.
Resolution of the issues is important for enhancing intra-trade among the member countries as trade activities between the countries is much lower than the target, they said.
The platform had set a target of increasing intra-trade to $500 billion by the end of 2018 but the volume stood at only $111 billion as of 2018.
One reason why the volume of intra-trade under the PTA is so small is the inclusion of the least or non-traded items in the offer list which bear little significance for the national economies, the concept note said.
It also urged the member countries to consider inclusion of more final and intermediate goods in their offer lists so that other countries can avail preferential benefits.
At the meeting, Turkey may place a trade facilitation strategy to boost the trade.
The platform also has a target to sign a free trade agreement, including goods, services and investment, once the PTA is fully implemented.
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