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Tuesday, 23 April, 2002, 12:17 GMT 13:17 UK
Bangladesh prepares to cut trade barriers
Bangladesh fan seller
Bangladesh's low-tech economy has a big trade deficit
Bangladesh might reduce its top import tariff to 30% from 37.5% in the budget for the fiscal year starting in July, in line with WTO free trade rules.

Finance Minister Saifur Rahman hinted at the tariff reduction during a meeting with customs officials on Monday.

Finance Minister Saifur Rahman
Rahman is expected to include the cuts in his budget
"We have to gradually cut tariff rates to pursue a policy of a free market economy. This is a practice every country is following now," Mr Rahman was quoted as saying.

The reduction would bring the top rate in line with those of India and Pakistan.

Recent trade talks between Bangladesh and India, its biggest trading partner and with which it runs a huge deficit, failed to resolved major disputes.

Bangladesh's major imports are machinery and equipment, chemicals, steel, textiles, food, crude oil and petroleum products.

Regional parity

The World Bank and International Monetary Fund (IMF) have put concerted pressure on Bangladesh to liberalise trade.

The Bank report recently criticised Bangladesh for making little progress in liberalising trade since the mid-1990s, and for imposing import bans and restrictions.

"Average tariff protection in Bangladesh is much higher than in all other South Asian countries' rates," it said.

"It is pertinent to note that unless it restarts its trade liberalisation process, Bangladesh is soon going to be left behind other South Asian countries."

The report said protection levels in Sri Lanka and Nepal were already much lower, and for the past five years protection in many areas, such as tariffs and agricultural state trading monopolies, had also been coming down rapidly in Pakistan.

"For example, with a few exceptions Pakistan's top tariff rate is now 30% compared with 42.7% in 1996/97," it said.

It said India also recently reduced the top tariff rate to 30%, with an indication that the maximum tariff will be brought down to 20% over the next three years.

See also:

17 Feb 02 | South Asia
Bangladesh talks with IMF fail
07 Feb 02 | South Asia
Asian meet aims to strengthen trade
08 Nov 01 | South Asia
Bangladesh gets no trade favours
31 Oct 01 | South Asia
Bangladesh edges toward gas exports
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