IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

NAMA Negotiations in the WTO and Preference Erosion: Concerns of Bangladesh and Other Regional LDCs

Listed author(s):
  • Mustafizur Rahman
  • Wasel Bin Shadat

The ongoing negotiations on non-agricultural market access (NAMA) in the WTO are expected to lead to substantive reductions in the tariff rates on industrial goods in both the developed and the developing countries. Although an agreement on the formula and coefficient(s) is yet to be reached, it is becoming increasingly clear that countries are moving towards a differentiated swiss-type formula with deeper cuts for higher tariffs. The July (2004) Framework Agreement stipulated that LDCs will not be required to undertake any tariff reduction commitments under the NAMA. However, LDCs are likely to suffer substantive tariff preference erosion as a consequence of NAMA negotiations since any tariff reduction by the developed countries will result in a fall in the preferential margins currently enjoyed by the LDCs under the various GSP schemes operated by the developed countries. Consequently, the competitive edge currently enjoyed by the LDCs by taking advantage of the preferential treatment under the various GSP schemes is set to suffer erosion. This is a major concern for Bangladesh and other LDCs in the Asia-Pacific region. This paper attempts to make an estimate about the range of preferential erosion for Bangladesh given her current trade pattern and preferential treatment enjoyed by her exports. The paper finds that for Bangladesh, the preferential erosion could be substantial (e.g. $42.1 million worth of net preference erosion in the EU alone for RMG products under one of the possible scenarios). Reduced preference margin will also undermine future competitiveness in the developed country markets. It is also to be noted that tariff reductions under NAMA will have positive implications for Bangladesh in the US market where most of Bangladesh’s industrial goods do not enjoy GSP treatment. Thus, tariff reduction under NAMA is expected to have diverse implications for Bangladesh’s export of industrial goods. NAMA, thus, may increase Bangladesh’s competitive edge vis-à-vis Caribbean and Sub-Sahara African countries which are currently enjoying zero-tariff access for apparels under the AGOA and the CBI. The paper reviews some of the proposals that are being discussed to address the possible negative consequences of preference erosion for the LDCs

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Centre for Policy Dialogue (CPD) in its series CPD Working Paper with number 51.

in new window

Length: 24 pages
Date of creation: Sep 2005
Handle: RePEc:pdb:opaper:51
Contact details of provider: Postal:
House 40C, Road 32, Dhanmondi R/A, Dhaka 1000

Phone: (880-2) 8124770
Fax: (880-2) 8130951
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pdb:opaper:51. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Avra Bhattacharjee)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.