Bangladesh seeks export privileges to US on climate vulnerability grounds

by Syful Islam | @youths1990 | Thomson Reuters Foundation
Tuesday, 20 May 2014 06:45 GMT

As extreme weather hits low-lying Bangladesh, it appeals for duty-free status citing its 'economic vulnerability'

DHAKA, Bangladesh (Thomson Reuters Foundation) – Citing its increasing vulnerability to the impacts of climate change, Bangladesh has sought exemption from quotas and duty for all its exports to the United States.

US trade representatives have said they will consider the call for “duty free, quota free” privileges, according to Bangladesh’s commerce secretary, Mahbub Ahmed.

Such a rule change, if adopted, would make Bangladesh one of the first countries to receive duty reductions for “economic vulnerability” because of climate change.

Increased emissions of greenhouse gases are blamed for a rise in global temperatures which is causing climate change, sea-level rise and an increase in extreme weather events. Those are having increasingly serious effects on the economies of many low-lying countries, including Bangladesh, widely judged one of the world’s most vulnerable countries to climate change.

Bangladesh’s planning minister, Mustafa Kamal, claimed recently that the country loses $2.2 billion a year due to the impacts of climate change. 

“We have sought duty- and quota-free market access of our apparel products to the U.S., taking into consideration Bangladesh’s vulnerability to climate change,” commerce secretary Ahmed told a press briefing after the first meeting of the Trade and Investment Cooperation Framework Agreement, a new bilateral forum, in Dhaka at the end of April.

Apparel accounts for nearly 78 percent of Bangladesh’s worldwide export earnings. The industry, worth $21 billion a year, employs around 3.6 million people directly, 80 percent of them women.

According to Ahmed, Michael Delaney, the assistant United States Trade Representative for South Asia, said that his country would take the issue under consideration in the future.

The United States is the world’s largest emitter of greenhouse gases, and Bangladesh is the second largest exporter of ready-made garments to the United States, after China.

Currently, Bangladesh is required to pay a 15.62 percent duty on these apparel products, a tariff which last year totalled $828 million.   

By contrast, China pays just 3 percent duty, while other Asian competitors pay rates ranging from 2.29 percent for India to 8.38 percent for Vietnam.

Many Bangladeshi products, apart from garments, had duty-free access to the U.S. market until last June, when that status was suspended citing poor working conditions and lack of labour rights in Bangladeshi factories following the Rana Plaza disaster.

NEW ECONOMIC VULNERABILITY

Ahmed said that when Bangladesh mentioned the duty-free, quota-free access for apparel products enjoyed by sub-Saharan African and Caribbean countries since 2000, the US trade team responded that the economic vulnerability of those countries was a consideration in these cases.

“(So) we raised the issue of Bangladesh’s vulnerability to climate change as a counter logic to strengthen our demand,” he said.   

In a phone interview, Ahmed said that developed countries have a non-binding commitment under World Trade Organisation provisions to offer duty-free access to all products from low-income countries.

The United States says it will wait until the conclusion of the Doha round of negotiations before taking a decision about duty-free, quota-free access to its markets for Bangladesh. Those negotiations have been largely stalled since 2008 over an impasse on agricultural imports.

Bangladesh, a low-lying country, has suffered in recent years from poor rainfall, droughts, and riverbank erosion made worse by rising sea levels, as well as an increasing number of natural disasters including cyclones, tornadoes and flash floods.

Communities in coastal areas are especially vulnerable to storms, and the frequent losses inflicted by them make it impossible for many to escape poverty.

 “The intensity and frequency of disastrous events will increase day-by-day due to the impacts of climate change,” said Ainun Nishat, an environmentalist and vice-chancellor of Brac University in Dhaka.

“Poor people – especially women and children in (the) coastal belt – are major victims of the impacts which are increasing their suffering,” he added.

Nishat said that if the Bangladeshi government cites climate change vulnerability in order to get duty-free, quota-free access for its products in the United States or other developed nations, it must ensure that a portion of the saved money goes to the victims of climate change.

“As you are seeking the privilege citing the vulnerability to the climate change, spending a fraction of money for adaptation to the hazard is rational,” he said.

Syful Islam is a journalist with the Financial Express newspaper in Bangladesh. He can be reached at: youths1990@yahoo.com

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