Growth of our export is considerably hampered because of Non-Tariff Barriers (NTBs) and Para-Tariff Barriers (PTBs) within SAARC (South Asian Association for Regional Cooperation) region despite SAFTA (South Asian Free Trade Area), especially when it comes to accessing the Indian market.
While some non-tariff measures are applied for legitimate reasons, others can be used as barriers to trade.
Those measures turning into effective trade barriers are generally called Non-Tariff Barriers (NTBs), and can be considered as a subset within the broader set of Non-Tariff Measures (NTMs).
An ITC (International Trade Centre) survey on 30 countries suggests that many NTMs, apparently believed to be in conformity with multilateral trading culture, cut across trade related procedures, technical regulations, standards, trade defense measures such as anti-dumping duties etc, security, health, environment, sanitary and phytosanitary measures.
These are also characterized by frequent changes that often render compliance difficult and hence create barriers.
In Bangladesh’s bilateral trade with its immediate neighbour India, NTBs have been a perennial irritant, and are generally considered to be a critical factor not allowing Bangladesh exports to grow up to their potentials (believed to be around $2bn).
There are also quarters that attribute the Indian NTBs as a calculated handiwork stemming from a mindset nurtured for long to protect India’s domestic supplies, to the disadvantage of exports from its neighbours.
Nonetheless, looking at India’s NTMs up close, one may find that some of the measures are not NTMs per se.
Lack of clarity coupled with cumbersome procedures makes them at times extremely difficult to comply with. The federal structure of India’s administration conflicting at times with the regulations of the States is also seen as NTBs that have no way to be negotiated bilaterally.
It is worth taking note those NTMs that are transparent and well-founded hardly ever figured in the debate.
It may be recalled that one of the most daunting of the Indian NTMs, relating to standards compliance when export of cement from Bangladesh got blocked due to the BIS’s (Bureau of Indian Standards) mandatory standard requirements in 2005, did not cause much of a fuss.
The procedures for compliance were clearly set out and, despite being time and cost-consuming, Bangladeshi exporters meticulously followed the necessary procedures including factory inspection to obtain BIS registration to recommence exports. This clearly testifies that where there is an NTM in its truly authentic spirit, it is not being construed as an NTB.
On the flip side, the imposition of anti-dumping duties on export of lead acid batteries from Bangladesh around a decade ago may be a case in point.
A bad case recognised by most Indian experts, the case lingered well over half a decade and eventually got dragged to the “value and volume definition” in the final court ruling by CEGAT (Central Excise and Gold Appellate Tribunal) which many in Bangladesh tend to view as not only arbitrary but thoroughly deliberate.
It was only after Bangladesh moved the DSB (Dispute Settlement Body) of the WTO that the Indian authorities removed the anti-dumping duties on the basis of a review petition to the Department of Commerce. This battery case, though too complex to be understood by commoners, has done much disservice to bilateral relations.
Coming to NTBs as roadblocks to trade, it may be seen that much of what are being raised now from Bangladesh’s side are not new. They have been on the agenda for some time now at official-level meetings, and discussed time and again by the leading Chambers of both countries.
These, broadly speaking, cut across a host of trade policy practices, customs and banking procedures, and infrastructure related matters.
These bottlenecks in various shapes and forms are decades old. The post shipment testing requirement, for example, has been a deterrent for long.
While the need for testing cannot be argued, the testing procedures for leather and leather goods, jamdani products exported from Bangladesh are stumbling blocks, potentially threatening to disrupt exports to India.
While most of these goods are transported through land routes, testing of these articles are done in laboratories as far as in Chennai and Delhi.
The delay in reaching the test results to the customs points heavily offsets trade benefits by way of, among others, cost escalation.
Equally flawed is the testing procedure for processed food products. Exported through land routes too, these products have to wait for test results conducted in central food testing labs in Guwahati, far away from the land ports.
There were instances of consignments held up for indefinite period, causing cancellation of orders.
Labelling and marking, printing of retail price (impractical from the exporter’s point of view) have also been causing glitches that can be easily addressed. The jute sack labelling requirement with “made in Bangladesh” boldly stitched on all individual pieces does sound outrageously trade-deterring, although it has been quite a while the issue is talked over and “taken note of” but kept unsettled.
These are more than just bottlenecks that prevent forging long term trade partnerships.
Mentioning the NTBs will make a long list, some of which are difficult to reason as they amount to alleged harassment by way of non-acceptance of certificates issued by designated agencies in Bangladesh, non-recognition of circulars of the Indian customs or of the DGFT (Director General Foreign Trade) by the land customs points, disputes (at times unnecessary) over HS classification of goods and so on.
Given where things stand, it makes sense that instead of pointing fingers, attempts should continue to engage both sides on issue-based agenda.
In this context, it might seem heartening to see that the joint customs group meeting between the two countries, held recently in Dhaka, attempted to address some of the longstanding barriers, which though mostly related to operational matters, would ease much of the difficulties once these are settled.
Notable among these include synchronizing of working hours and days at 16 land customs stations (LCSs), extension of car pass system within each other’s territory, allowing customs officials to cross the borders to each other’s LCSs for coordination and resolving operational issues.
Remarkable among these is the decision to keep two important LCSs on either side open on all seven days of the week, namely Benapole-Petrapole and Akhaura-Agortola LCSs. These are steps that do speak of engaging each other in a more forthcoming manner than perhaps ever before.
