WTO TRADE POLICY REVIEW OF BANGLADESH
Statement by U.S. Ambassador Rita Hayes
May 2, 2000

We welcome Secretary Rahman and his delegation to Geneva for this second trade policy review of Bangladesh We look forward to discussing the progress that Bangladesh has made in liberalizing its trade and investment regime and discussing the specific questions which we have tabled. We appreciate the thorough report prepared by the Secretariat and the remarks by the discussant.

Bangladesh is an active and important participant in the WTO. We have a long history of working together on matters of mutual concern. Most recently in preparation for the Seattle Ministerial, we developed a proposal to revitalize the Integrated Framework of technical assistance for the benefit of the least developed countries. We appreciate Bangladesh=s continued leadership and creativity in this area.

The U.S. GSP program and generous quota arrangements have played an important role in the impressive growth of Bangladesh=s exports. The United States is Bangladesh=s largest overseas market, accounting for 40 percent of its exports, worth $1.9 billion in 1999. We are also the largest consumer of apparel products from Bangladesh, which comprised approximately 85 percent of our imports from Bangladesh.

We encourage Bangladesh to reconsider its import bans on a number of textile and apparel items. Import bans undermine the international competitiveness of producers, induce smuggling and can limit new business opportunities.

Bangladesh has become a major producer of textiles and apparel, which now account for 84 percent of its exports. While the growth of this industry is impressive, this heavy dependence on textile and apparel exports suggests a need for greater diversification. One path towards addressing this problem is through privatization and expanded commitments in services.

As the Secretariat=s report notes, Bangladesh maintains a high level of state run enterprises and has not made use of the GATS framework. We strongly encourage Bangladesh to make broader commitments in the services area. Liberalization of infrastructure and financial services would, in particular, complement Bangladesh=s investment objectives.

We applaud Bangladesh=s efforts to attract business through its liberal investment regime, and we are encouraged by the efforts Bangladesh has made to simplify its tariff structure and reduce applied rates. However, Bangladesh remains heavily dependent on border tax revenue and the complexity of the tariff system continues to create economic inefficiencies at the expense of development. Accordingly, we encourage Bangladesh to consider additional tariff reform measures, such as eliminating combined tariffs, expanding bindings on industrial tariffs, and reducing the confusing array of tariff and tax concessions.

The Report indicates that Bangladesh has not provided notifications or has yet to implement its WTO obligations in several areas, including import licensing, customs valuation, TBT, and several subsidy-related programs. However, it is clear from the Report=s annex on technical assistance that both the Secretariat and Bangladesh have made an effort to identify areas where technical assistance is needed.

The United States has played an important role in the Integrated Framework activities for Bangladesh. We expect to provide over $2 million in trade-related technical assistance activities to Bangladesh this year. This assistance has addressed market access, tariff reduction, agricultural, sanitary and phytosantiary issues, business development and training, transparency and regulatory reform, and trade facilitation measures.

We hope today to get a better understanding of where Bangladesh stands on implementation and to identify more fully additional technical assistance needs. We are committed to working with WTO Members to address implementation issues in a practical manner, that both recognizes resource constraints of certain members and endeavors to honor the obligations made during the Uruguay Round

In that regard, we encourage Bangladesh to send experts from Dhaka to the July WTO TBT workshop. This workshop will provide an opportunity for Bangladesh and other LDCs to identify and provide examples of where they experience difficulties in implementing the TBT Agreement.

We are pleased that the Government of Bangladesh is working with the ILO to reduce child labor. Since 1995, some 9,000 former children garment workers have been provided with educational opportunities. To encourage further progress in this area, President Clinton announced an $8.6 million assistance package during his recent visit to South Asia. We encourage Bangladesh to undertake similar efforts to develop rights of association for workers in export processing zones.
Export growth in Bangladesh has nearly tripled since 1992. This is a clear demonstration that countries at all levels of development can benefit from the global economy. The United States stands ready to play a continued role in Bangladesh=s economic development, both through trade preferences and a commitment to technical assistance.

At the same time, Bangladesh must also continue to look reform from within. We encourage Bangladesh to consider seriously the comments made by the Secretariat in its report and by Members during today=s meeting, with respect to further trade liberalization. Bangladesh has much to gain from expanded services commitments, follow-through on technical assistance activities, and its full participatation in WTO work.