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U.S. Statement on the Trade Policy Review of Bangladesh
October 15, 2012

Statement delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO

October 15, 2012 

Thank you, Chair.

The United States welcomes the participation of the delegation of Bangladesh, led by Secretary Hussain of the Ministry of Commerce.  We also welcome our colleague Ambassador Hannan, whom all of us in Geneva know as an extremely effective advocate for his country.  We wish to express our appreciation to the Government of Bangladesh and the WTO Secretariat for preparing and circulating the helpful reports that highlighted Bangladesh’s trade and investment regime.  We also thank Ambassador Ismail (South Africa) for his observations about the developments that have taken place in Bangladesh since its last review in 2006.

This timely exercise coincides with a rapidly growing bilateral trade and investment relationship between the United States and Bangladesh.  We see this most clearly in the strong partnerships created by Bangladeshi apparel producers and many leading U.S. retailers, meeting the growing demands of the U.S. market for such apparel while helping to generate increased foreign exchange and establishing good business and labor practices in Bangladesh.  With our two way goods trade increasing at an annual rate of 20%, and corresponding growth in two-way foreign direct investment, the United States looks forward to deepening this strong bilateral economic relationship.  We also note that Bangladesh’s recent consistent 6+% annual economic growth, the impressive reduction in poverty in the last twenty years, and the government’s Vision 2021 plan set the stage for us to be optimistic about that objective.

The United States observes that Bangladesh has made efforts to use trade and investment policy, formulated in consultation with its private sector advisory bodies, to support its important economic development goals.  In this respect, the United States commends Bangladesh on the concrete steps taken to streamline and modernize its customs regime, in particular, those steps that have significantly reduced the time required for customs clearance.  These improvements, and others planned by the government to facilitate trade, not only make it much easier for Bangladesh industries to export their goods to foreign markets; they also lower the costs of bringing in imported goods as inputs and can thereby help promote domestic consuming industries such as the important apparel sector.  Bangladesh is a case study in the importance of trade facilitation.

These positive steps in the customs and trade facilitation context would be reinforced by similar steps taken in respect of Bangladesh’s duties, taxes and charges.  The Secretariat Report highlights the significant gap between bound and applied tariffs and the growing use of supplementary duties, charges and protective levies.  These characteristics of Bangladesh’s import regime add costs of unpredictability to the relatively high MFN tariffs already in place and, as a result, significantly increase the burdens imposed on traders and limit the benefits to be gained by the customs improvements Bangladesh has undertaken.

The United States welcomes the continuing growth in Bangladesh’s services sector and the increasing role services play in the development of Bangladesh’s economy.  The benefits of opening the telecommunications sector, particularly in terms of significantly increased connectivity and the plummeting costs of communication, attest to the potential that services continue to hold for meeting Bangladesh’s development objectives.  The United States invites Bangladesh to take steps to replicate these gains in other sectors by further opening its services market, particularly in areas such as energy, transportation and financial services.  Such opening can not only create commercial opportunities in those sectors, but can have significant positive spillover effects by facilitating investment and manufacturing in other sectors.

The United States recognizes that foreign investment plays a critical role in Bangladesh’s plan for meeting its economic development objectives, and shares Bangladesh’s goal of creating the right environment to attract foreign investment.  While the policy changes that we have discussed here this morning will move Bangladesh toward this goal, the Secretariat Report draws attention to additional actions Bangladesh can take to meet its foreign investment goals.  These include actions to address infrastructure bottlenecks and the operation of Bangladesh’s legal system, as well as other “doing business” challenges that would be faced by potential investors. We have also discussed bilaterally that improving labor practices helps to create a stable industrial relations environment for investors and supports your broader development objectives.  We look forward to hearing more from Bangladesh about what steps it is considering taking to mitigate some of these challenges.

The United States has worked closely with Bangladesh over many years in helping to improve the conditions for the government to take actions that promote economic growth and a positive climate for business and workers.  We stand ready to continue that work with Bangladesh to help address its critical development issues.  In particular, we look forward to re-doubling our efforts with Bangladesh, bilaterally and multilaterally, to find ways to make sure that trade and investment remain a key part of the solution to Bangladesh’s development challenges.

The United States appreciates this opportunity to participate in this discussion and looks forward to exploring Bangladesh’s trade and investment regime with the delegation from Bangladesh and other Members. We thank Bangladesh for its answers to our advance written questions and look forward to reviewing them.  We also look forward to continuing our work with Bangladesh and our trading partners to strengthen the global economy and the multilateral trading system embodied by the WTO, allowing trade and investment opportunities to expand.  We wish Bangladesh a successful review.

Thank you.