Bangladesh gets tariff exemption from China

By New Straits Times - June 23, 2020 @ 11:45am

Women working in a garment factory on the outskirts of Dhaka, Bangladesh, recently. Pix: AFP

CHINA has provided a huge trade boost to Bangladesh by announcing tariff exemptions for 97 per cent of Bangladeshi exports into the country, starting July 1.

The decision came one month after Bangladeshi Prime Minister Sheikh Hasina and Chinese President Xi Jinping held discussions to boost bilateral relations.

The announcement was made by the Bangladeshi Foreign Ministry last Friday after China responded favourably on June 16.

Quoting the ministry, the Dhaka Tribune said the tariff exemptions came after the two countries also exchanged letters on economic issues between them.

With this new duty-free announcement, 8,256 Bangladeshi products would be exempted from tariffs when entering the Chinese market.

At present, only 3,095 Bangladeshi products enjoy duty-free access to the Chinese market under the Asia-Pacific Trade Agreement.

During the Asian-African Conference, which took place last week in Indonesia, Xi announced that China would grant duty-free market access to least developed countries on 97 per cent of the tariff lines within a year.

China's tariff exemption is expected to help Bangladesh cushion the economic impact of the Covid-19 pandemic.

Times of India reported that the tariff move comes when India-China relations are at an all-time low with the border face-off at the Galwan Valley.

Bangladesh, seen as a strong ally of India, seems to be wooed by China. The timing coincides with the redrawing of maps by Nepal that India said included parts of its territory, the report said.

It implies that India is being boxed in with bordering countries warming up to China and Pakistan being a close ally of China.

This trade benefit comes as a boost to Bangladesh's developing economy, and more importantly, provides Dhaka the support of Beijing, that could grow to a level that may cause discomfort for New Delhi.

Bangladesh shares its longest border with India. It took years for New Delhi to work on the balance of power in the subcontinent and build a strong alliance.

India has been wary of China trying to eat into its economic interests in Bangladesh, but friendly ties between Dhaka and New Delhi suffered recently.

Matters were comfortable until India's domestic policy on the National Register Citizens and the Citizenship Amendment Bill, both of which impact Bangladesh, generated unpleasantness in the relationship.