Bangladesh will propose relaxing the rules of origin – lowering local value addition requirements from 40% now to 25% – to derive more benefit from the duty-free facilities given to it by China.
Bangladeshi officials will seek this privilege at the Bangladesh-China foreign office consultation meeting to be held this month.
Seeking anonymity, a commerce ministry official told The Business Standard that the government should request the Chinese authorities to relax the Asia-Pacific Trade Agreement (Apta) rules of origin for zero tariff treatment for processed products from Bangladesh.
China offers duty-free facilities for 8,549 Bangladeshi products under the least developed country category, but sugar is not on the list. Meghna Group exports sugar to China, and it has written to the commerce ministry to take necessary steps to ensure that China provides duty-free facilities for sugar exports. This proposal will also be on the agenda of the upcoming meeting.
According to the commerce ministry, Bangladesh imports its highest volume of products from China, with imports amounting to $11.5 billion in the 2019-20 fiscal year against exports of $600 million.
Products that are most exported from Bangladesh to China include: raw jute, jute yarn, jute products, leather, shrimp, frozen fish, woven garments, textile fabrics, plastic waste, camera parts, and PVC bags.
Bangladesh imports industrial raw materials and finished products ranging from cotton to fabrics to boilers, machinery and equipment from China.
Bangladesh will seek joint venture investment from China in industries like leather goods, IT, light engineering, agro processing, foods, shipbuilding and high value-added textile sectors.
In addition, a proposal will be tabled to China seeking technical and financial assistance to set up design institutes for readymade garments and leather sectors.
Dhaka will also request the Chinese authorities to allocate free space for Bangladesh to participate in various international trade fairs organised in China.