The signing of a preferential trade agreement with Nepal has hit snags as Nepal demands the elimination of other duties and charges (ODCs) along with customs duty for striking the deal.
Nepal has been repeatedly seeking exemptions from ODCs, including supplementary duty, regulatory duty and other taxes, on export of its products to Bangladesh under the proposed PTA, Bangladesh trade officials said.
Although the commerce ministry is quite positive about accepting the condition, customs authorities are not willing to do so, they said, adding that the situation was delaying the progress in signing the trade deal.
The National Board of Revenue is in favour of the elimination of only customs duty under the proposed PTA as the other duties, such as SD and RD, are imposed to protect the local industry, they added.
Both the countries initially tried to seal the deal by 2020 but it was delayed due to differences of opinion on various issues, including the elimination of ODCs and finalisation of the lists of products eligible for duty benefits, they added.
Earlier on December 31, 2020, Nepalese ambassador Banshidhar Mishra at a meeting with commerce secretary Md Jafar Uddin raised the issue of elimination of ODCs for reaching the PTA with Nepal.
He also requested to shorten the Bangladesh’s request list containing the names of exportable products for tariff concessions under the proposed PTA.
In response, the Bangladesh commerce secretary informed that the issue of ODCs was under positive consideration within the purview of WTO regulations, according to the official excerpts of the meeting.
The meeting also agreed to set a date for the next trade negotiation committee meeting sometime in January 2021 but the meeting is yet to be held due to non-response from Nepal, a senior trade official said.
The Bangladesh side is ready to hold the meeting and move forward to sign the agreement, he said.
Nepal is probably insisting on including the provision of elimination of ODCs to avoid complexities in trade with India under the Treaty of Trade under which Nepal will have to offer similar treatment to India given to any third country, he said.
On the other hand, Nepal cannot impose ODCs as per World Trade Organisation rules due to the country’s membership nature with the WTO.
He, however, said that the issues would be solved through negotiations at the TNC meeting where representatives from the NBR and commerce ministry would attend to finalise the deal.
Bangladesh prime minister Sheikh Hasina and Nepal president Bidya Debi Bhandari on March 22, during the latter’s Dhaka visit, decided to expedite the process of signing the PTA to boost bilateral trade.
Bangladesh has already sent a list of 42 products for getting tariff concession in Nepal market under the PTA while Nepal forwarded a list of 20 products for similar treatment.
Bangladesh in its list sought duty-free benefit for export of readymade garment items, including t-shirts, shirts, underpants, refrigerators, freezers, electric accumulators, motorcycles, furniture, prefabricated buildings, vegetables, sugar confectionary items, chocolate and other food preparations such as biscuits, jams, fruit jellies, juices, sauces, pharmaceuticals products, plastics, tableware and kitchenware, households articles and uncoated paper and paperboard.
Bangladesh exported goods worth $46 million to Nepal while imported products worth $15 million from the country in the fiscal year of 2019-20.
Source: NEWAGE Business
