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THE Indian State Minister for Commerce, Mr. Jairam Ramesh, who was recently in Dhaka to represent his country in the SAFTA Ministerial Council, urged Bangladeshis to be less suspicious of New Delhi's motives. According to local press reports, his exact words on this point were : "Bangladesh has to be less instinctively suspicious of our motives". One cannot contest that what he said is not a good piece of advice. As between individuals, sound relations between nations cannot be built without the strong foundations of mutual trust.
Mr. Jairam reportedly also said, in course of his meeting with the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), India is eager to reduce the bilateral trade imbalance against Bangladesh and has resolved to create a win-win situation for its immediate neighbours. It is a reassuring statement for Bangladesh as her annual trade deficit with India has already exceeded $1.8 billion.
While making these reassuring statements, did Mr. Jairam Ramesh know that, only three days prior to his meeting with the FBCCI, the Dhaka press reported that India has raised restrictive tariff and technical barriers to discourage the import of Bangladeshi jute products into its market? According to press reports, India has increased its effective tariff on jute products from the SAARC countries from the previous 8.0 per cent to 12 per cent and has made the chemical testing certification mandatory for these imported products. The certificates, to be issued by the Indian authorities, have to mention that oil content of jute twines does not exceed 3.0 per cent. The Indian importers are now required to pay 15 per cent duty on jute cultings and 4.9 per cent on raw jute, which were previously zero duty items.
The restrictive duty structures are said to have been enforced by India following a five-fold increase in export of Bangladeshi jute products during the April-November period of last year to its market. The Bangladesh Jute Spinners Association, which previously hoped that export of jute products to India would reach 30,000 tonnes in the current fiscal year from last fiscal year's 7000 tonnes, is now complaining that jute goods export to that country has sharply gone down.
What will Mr Jairam Ramesh say about these restrictive measures, which have visibly forced the Indian businessmen to reduce import of Bangladeshi jute products? His country has obviously taken these protectionist measures to shield its domestic jute industries. But Bangladesh has very few export items. Jute and jute products are among those few export items. With the restrictive measures put into force, which have already drastically curtailed the exports of these products to its market, how does India propose to reduce her huge trade gap with Bangladesh? Being the largest economy and greatest beneficiary of the intra-regional trade in South Asia, could not India make a little sacrifice for a small reduction of its huge trade surplus with Bangladesh?
India has so far displayed an extremely protectionist tendency in conducting trade with Bangladesh. One can't readily say exactly how many non-tariff barriers and para-tariff barriers are there to restrict the entry of Bangladeshi products. Such barriers are hard to detect by small exporting countries, like Bangladesh, which have virtually no commercial intelligence capacity to gather information about various covert trade distorting practices in countries from which they import and to which they export.
Apart from such barriers, which are often alleged by Bangladeshi exporters, India previously also took some trade restrictive measures against Bangladeshi exports at least on three known occasions.
West Bengal's luxury tax in addition to New Delhi's central effective duty on imported cosmetic products drastically reduced the export of such Bangladeshi products to its market. New Delhi took long to appreciate that, on signing the South Asian preferential trade agreement, the Republic of India acquired a moral and legal obligation to restrain her states from introducing local tax or taxes which could have annulled the spirit of the agreement and have trade distorting effects on the export of partner countries to its market.
After the signing of the SAPTA, some Indian businessmen began to import and placed new orders for Bangladeshi ready-made shirts, being enthused by the provision for reduced preferential tariff under the agreement. India then exercised its sovereign right for introducing a minimum but high payable tariff on all imported shirts. It made the import cost of Bangladeshi shirts in India prohibitively high and its importers ceased placing new order for the Bangladeshi shirts. The growing trade ended there.
As if the said trade distorting measures of our largest trading partner under the SAPTA, now SAFTA, were not enough to internalise what Mr. Jairam called "suspicion of our motives" in the instinct of Bangladesh. The Indian government then went for imposing the controversial anti-dumping duty on Bangladeshi lead-acid batteries. This additional duty was imposed by invoking the relevant agreement of the World Trade Organisation (WTO), which confers an importing country the right to impose this duty on a product if it is exported at a price below an allowable limit of the cost of production. This allowable limit is technically called the de minimis in the pertinent WTO agreement.
The agreement envisages that if the difference between the export price and the cost of production of a disputed item is found to be de minimis or within the allowable minimum level, the anti-dumping proceeding should be terminated forthwith and that, in the event of the difference being above the de minimis level, the anti-dumping duty imposed should not exceed the margin of dumping, which is the difference between the export price and the cost of production.
In their preliminary investigation, as per the relevant WTO agreement, the Indian anti-dumping authorities found and declared that the level of dumping of Bangladeshi lead-acid batteries was de minimis or not cognisable. But in their final investigation they revived the charge of dumping of these Bangladeshi batteries in contravention of the provisional of the WTO agreement. While imposing the anti-dumping duty, the Indian anti-dumping authorities did neither determine the dumping margin ignoring the requirement of the WTO agreement.
The anti-dumping duty thus imposed obstructed the export of Bangladeshi lead-acid batteries to India for several years. Were they actually buying time to become self-reliant in or reduce the import requirement by enhancing domestic production of this item? When all efforts at the bilateral level to resolve this unnecessary problem failed, Bangladesh had to seek consultation with India in Geneva on the matter under the legal arrangement of and with notice to the WTO. New Delhi then adopted a face-saving way of rescinding the anti-dumping duty, and the anti-dumping duty was finally withdrawn.
Mr. Jairam Ramesh may check the records of the Indian government on these issues and tell us whether he would again like to advise us that "Bangladesh has to be less instinctively suspicious of our motives". We would like to believe that the present Indian government may behave differently in days ahead.
Mr. Jairam may kindly note that it is always vexing and perplexing for the people of Bangladesh to confront a situation when they have to oppose or say anything against India. That's a country which was stridently with us in our liberation war.
But the fact that we fought for our freedom also underlines a fact that we immensely value our freedom. Our instinct will always prompt us to rise up in the defence of our national interest. That virtue of ours should not be construed by our friends in India or any other country as our instinctive suspicion of their motives.
The Indian State Minister for Commerce may kindly advise his government to revoke the recently introduced tariff and technical barriers against Bangladeshi jute and jute products and to create no new ground for Bangladesh or any of its neighbours to suspect the motive of India. Being the largest country of the sub-continent, India should be less conservative and self-seeking for any intra-regional arrangement to function successfully.
Sorry to say, after signing a preferential trade agreement and then a free trade agreement, if the partner countries want to protect each and every of their industries and also the prospects of future industrialisation, then these arrangements for the unsteady and disadvantaged partners will be hurtful like boomerangs.
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