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Stakeholders’ Conference. Assessment of Bangladesh-India Trade Potentiality Need for Cross-Border Transport Facilitation & Mutual Recognition of Standards. Kolkata; 16 November, 2013. Presentation by. Dr K G Moazzem Additional Research Director Centre for Policy Dialogue (CPD) Bangladesh.

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Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

Stakeholders’ Conference

Assessment of Bangladesh-India Trade PotentialityNeed for Cross-Border Transport Facilitation & Mutual Recognition of Standards

Kolkata; 16 November, 2013

Presentation by

Dr K G Moazzem

Additional Research Director

Centre for Policy Dialogue (CPD)

Bangladesh


Contents

Contents

  • Ongoing Studies: Goals and Objectives

  • Key findings from the first phase of the study

  • Need and rationale for the second phase of the study

  • How to/why push the agenda for cross-border transport facilitation and mutual recognition of standards

  • The Expected outcomes/benefits

  • Outline of a model to quantify the benefits accruing from cross-border trade facilitation


1 ongoing studies goals and objectives

1. Ongoing Studies: Goals and Objectives

  • Two studies are being carried out by CPD and CUTS

    • Study on “Addressing SPS issues and concerns in Bangladesh-India Trade: Design of a Draft SPS Agreement”

    • Study on “Assessing Benefits of Trade Facilitation through Bangladesh India MVA”

  • Study on SPS Issues: Goals and Objectives

    • Identify SPS related concerns

    • Prepare mechanism for SPS related dispute settlement

    • Prepare draft SPS agreement

    • Come up with a framework for MRA

    • Suggest actions for enforcement of the agreement


1 ongoing studies goals and objectives1

1. Ongoing Studies: Goals and Objectives

  • Study on “Assessing Benefits of Trade Facilitation through Bangladesh India MVA”: Goals and Objectives

    • Review the proposed MVA

    • Analyse the current state of transport of goods

    • Analysis the economic benefits of signing an MVA

    • Recommend initiatives and actions for operationalising the MVA


2 key findings from the first phase of the study

2. Key Findings from the First Phase of the Study

Bilateral Trade between Bangladesh and India

  • Accelerated bilateral trade between Bangladesh and India over the years

    • Rising share of Bangladesh’s export to India; mixed trend in case of India’s export to Bangladesh

  • Volume of trade: US$5.5 billion in 2012; large flow of goods from India

    • Bilateral trade between India and Bangladesh has experienced more fluctuations vis-à-vis those of their global trade indicating lack of consistent demand

  • Opposite trends in India and Bangladesh in case of export concentration particularly since 2007 (SAFTA)

    • Gradual deceleration in concentration in Bangladesh’s export and further concentration in India’s export

  • No. of Bangladesh’s exported products has significantly increased (from 145 in 2001 to 583 in 2012)

Bangladesh-India Trade: 2001-2012

Source: UNCOMTRADE Database, 2013


1 key findings from the first phase of the study

1. Key Findings from the First Phase of the Study

Products Traded between Bangladesh and India

  • Agricultural products, raw materials and intermediate products comprise a major share in Bangladesh’s export

  • Jute, sacks & bags, nuts edible, fresh or dried, yarn of jute or of other textile bastfibres, fish nes, fresh or chilled, light petroleum oils and preparatiols, waste and scrap, copper or copper alloy, mens/boys shirts, of cotton, cereal bran, anhydrous ammoni, portland cement, mens/boys trousers and shorts

  • Import from India comprises raw materials, intermediate products: Cotton, Telephones for cellular networks mobile telephones, Hot roll iron/steel nes, coil, Denim fabrics of cotton, Woven fabrics, Polyethylene terephthalate, Reactive dyes, Flat rolled prod,i/nas,plated or coated and Parts for diesel and semi-diesel engines

  • Northeast Indian states import about 12% of Bangladesh’s export to India and export about 2.6 % of Bangladesh’s import from India

  • Major Traded Products with North East India

    Source: Rahman (2012)


    1 key findings from the first phase of the study1

    • Bilateral Trade Potentials

    • Bangladesh possess significant export potentials to the Indian market.

      • A number of existing exported products very less potentials to export (including jute, jute yarn, fish, cereal bran, port land cement, crushed stones, vegetable fats)

      • Trade Potentiality is rather high in less traded non-traditional products (bicycles, footwear, plastic wastes, apparels, leather products, cargo vessels): Less of agricultural products

    • India has significant export potentiality to Bangladesh’s market: a number of existing traded products have limited trade potentials

      • About 1278 out of 3894 products have trade potentials of at least US$ 1 million

    • A number of studies have examined trade potentiality between Bangladesh and India under different trade scenario (under SAFTA framework; RCA analysis): Mustafiz et al., 2010; De, Selim and Kathuria, 2012; World Bank, 2013)

    1. Key Findings from the First Phase of the Study

    Indicative Potentials of Export of Major Bangladeshi Products to India


    1 key findings from the first phase of the study2

    1. Key Findings from the First Phase of the Study

    India’s export potential in 2012

    Bangladesh’s export potential in 2012


    1 key findings from the first phase of the study3

    1. Key Findings from the First Phase of the Study

    2. Trade Cost in connection with Bangladesh-India Trade

    • Trade costs between India and Bangladesh is still very high although it has declined

    • Trade cost in countries outside the region particularly with key destinations is rather low

      • Better trade connectivity through sea route

    • Import tariff on Indian products is guided by SAFTA rules for products originating from developing countries

      • 993 products under SAFTA sensitive list

    • Moazzem- Kishore (2013) suggested a mechanism to prune the SAFTA sensitive list.

    Source: World Bank, 2013

    Source: UNCOMTRADE, 2013


    1 key findings from the first phase of the study4

    1. Key Findings from the First Phase of the Study

    2. Trade Cost in connection with Bangladesh-India Trade

    • Bangladesh’s entrepreneurs often complain about beyond the border taxes/cess/levies in

      India. These duties include:

    • Additional Duty (Countervailing Duty) (CVD): This additional duty is levied under section 3 (1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured or produced in India (generally ranging between 4% to 8% of assessed value).

    • Secondary and Higher Education Cess: 2% and 1% respectively on customs duties(CD+CVD).

    • Additional Excise Duty: 4%, paid at customs point but rebatable when VAT is paid.

    • Total tax incidence could vary between 8.3% to 12.7% (4.4% to 8.6% if additional excise

      Duty is excluded).

    • However, it needs to be pointed out that Indian producers are also subject to these taxes It is unlikely that Bangladeshi exporters will receive more favourable taxes treatment than the Indian producers.

    • However, Bangladesh has a strong case for withdrawal of the additional excise duty which is eligible for duty drawback at the time of payment of VAT.

    • Bangladesh could argue for withdrawal of additional duties on the following grounds:

      – Importers tend to set price for items imported from Bangladesh by taking into cognisancethe duties paid at the customs point, which make Bangladeshi goods less competitive.

    • A part of importers’ capital is stuck on account of duties paid.


    Ntbs in bilateral trade

    1. Key Findings from the First Phase of the Study

    NTBs in Bilateral Trade

    Major NTBs in SAARC Region

    • A survey of NTBs reported by SAARC member countries to the Committee of Experts (CoE) shows that most frequently imposed NTBs in the SAARC countries relate to

      • SPS; TBT; Quotas; Antidumping measures ; License requirements ; Countervailing measures

    • The overwhelming majority of NTBs indeed relate to compliance with SPS and TBT requirements.

    Source: Mustafiz (2012)


    Ntbs complaints and responses submitted at the meeting of coe

    1. Key Findings from the First Phase of the Study

    Exporting Country: Bangladesh; Responding Country: India

    NTBs: Complaints and Responses Submitted at the Meeting of CoE


    Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

    1. Key Findings from the First Phase of the Study

    • Exporting Country: India; Responding Country: Bangladesh


    Standards and sps related issues in case of export to india

    1. Key Findings from the First Phase of the Study

    Standards and SPS related issues in case of export to India

    • Bureau of Indian Standards (BIS) is responsible for formulating and enforcing standards for 14 sectors.

      • Production and general engineering; civil engineering (as of 1 January 2011); chemical (15 October 2010); electro-technical (1 July 2009); food and agriculture (9 June 2010); electronics and information technology (1 April 2010); mechanical engineering (1 April 2010); management and systems (1 Oct 2010); metallurgical engineering (6 July 2010); petroleum, coal, and related products (1 July 2010); transport engineering (1 January 2011); textile (1 April 2008); water resources (1 April 2010); and medical equipment and hospital planning (1 January 2011)

    • Indian Standards, 2007‑10

    Source: WTO Trade Policy Review – India, 2012


    1 key findings from the first phase of the study5

    Sanitary and PhytosanitaryLegislation, 2011

    1. Key Findings from the First Phase of the Study


    1 key findings from the first phase of the study6

    1. Key Findings from the First Phase of the Study

    • In August 2006, the Central Government passed the Food Safety and Standards (FSS) Act of 2006 to consolidate separate laws, and to establish the Food Safety and Standards Authority of India (FSSAI).

      • These laws include: the Prevention of Food Adulteration Act 1954; the Fruit Products Order 1955; the Meat Food Products Order 1973; the Vegetable Oil Products (Control) Order 1947; the Edible Oils Packaging (Regulation) Order 1988; the Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control) Order 1967; and the Milk and Milk Products Order 1992.

    • Imports of animal products into India require sanitary import permits issued by the Department of Animal Husbandry, Dairy and Fisheries;

      • Permits must be obtained prior to shipping from the country of origin.

    • Imports of plants and plant materials are regulated under the Destructive Insects and Pests Act 1914, the Plant Quarantine (PQ) (Regulation of Import into India) Order 2003, and international conventions.

      • All plant and plant material consignments must be accompanied by a phytosanitary certificate issued by the national plant protection organization of the exporting country and an import permit issued by the officer in charge of the plant quarantine station.

      • Plant Quarantine (Regulation of Import into India) Order 2003.


    1 key findings from the first phase of the study7

    Plant Quarantaine, 2011

    1. Key Findings from the First Phase of the Study

    Source:Plant Quarantine (Regulation of Import into India) Order 2003.

    • Sampling and testing of consignments to prevent the risk of exotic pests is undertaken

      • According to the International Standards for Phytosanitary Measures Guidelines No. 23 and 31

    • Imports of GM food, feed, and organisms, and living modified organisms for R&D, food, feed, processing in bulk, and environment release is governed by the Environment Protection Act 1986 and Rules 1989.

      • Imports of products containing GM material for industrial production or environmental release are allowed only with the approval of the Genetic Engineering Approval Committee (GEAC).


    1 key findings from the first phase of the study8

    1. Key Findings from the First Phase of the Study

    3. Standards and SPS related issues in case of Export to Bangladesh

    • The main institutions are the Bangladesh Standards and Testing Institution (BSTI) and the Bangladesh Accreditation Board (BAB)

    • As of 2012, there were 3,498 standards in Bangladesh, of which 155 compulsory standards are in force.

      • Testing and certification procedures for compulsory standards are the same for domestic and imported products.

      • BSTI develops national standards for products and services

    • As of today, international standards adopted by BSTI include 1368 International Standardisation Organisation (ISO) Standards and 163 International Electrotechnical Commission (IEC) standards.

      • Bangladesh is a member of the ISO 1974, and in 2001 became an affiliate member of IEC

    • Bangladesh is upgrading its quality infrastructure to international level by collaborative efforts with the newly operational Bangladesh Accreditation Board. Under the Bangladesh Accreditation Act (2006), the Bangladesh Accreditation Board (BAB) was established as an autonomous organization


    1 key findings from the first phase of the study9

    1. Key Findings from the First Phase of the Study

    A. Food Products (18 Items):

    B. Chemical Products (08 items)

    C. Textile Product (2) Items

    • List of Imported Products brought under mandatory certification before Customs clearance

    D. Electrical & Electronic Products (07) Items

    E. Engineering Products (04) Items


    1 key findings from the first phase of the study10

    3. SPS related issues in case of Bangladesh

    1. Key Findings from the First Phase of the Study

    • Proposed Road Map for Upgradation of BSTI Labs

    • Indian Prime Minister has agreed to support the upgradation of the Bangladesh Standard Testing Institute (BSTI) with a view to building capacity on certification.

    • According to the Roadmap

    • BSTI is to send pre‐assessment reports and report on actions taken and under process by BSTI to Norwegian Accreditation Authority (NAA) and Bureau of Indian Standards (BIS).

    • BIS resource persons will visit BSTI to provide technical assistance to address issues of accreditation. Additional trainings may be arranged.

    • If NAA gives a sensitive response, BSTI will immediately apply to the National Accreditation Board for Testing and Calibration laboratories (NABL) of India for accreditation of its food laboratory. There is a strong case for giving this route due priority.

    • After completion of all due processes, the BIS team may visit BSTI and make recommendations.


    1 key findings from the first phase of the study11

    1. Key Findings from the First Phase of the Study

    • BSTI had initially applied for accreditation of the product certification system to NABCB (National Accreditation Board for Certification Bodies), India incorporating 5 products namely i) Protein Rich Biscuit, ii) Wafer Biscuit, iii) Edible Gel, iv) Fruit Drinks & v) Chutney as the scope of accreditation. 

    • NABCB has accorded accreditation of BSTI product certification system for a period of 3 years starting from 9 January 2012.


    1 key findings from the first phase of the study12

    1. Key Findings from the First Phase of the Study

    • Sanitary and phytosanitary (SPS) standards

    • Sanitary standards in Bangladesh are governed by the Pure Food Ordinance 1959, as revised by Food Safety Ordinance 1994; and the Pure Food Rules.

    • Phytosanitary standards in Bangladesh are governed by the Destructive Insects and Pest Rules 1966 and the Plant Quarantine Act 2011.

      • Formulation of rules under the Plant Quarantine Act, 2011 is under way.

    • Sanitary and phytosanitary standards are also governed by other legal instruments

      • Bangladesh Diseases of Animal Act, 2005 and Bangladesh Diseases of Animal Rules, 2008, Bangladesh Animal and Animal Product Act, 2005, Bangladesh Fish and Animal Feed Act, 2010 and Bangladesh Animal Slaughter and Meat Quality Control Act 2011.

    • SPS measures in the fisheries sector for both the export market and for domestic consumption

      • Fish and Fish Products (Inspection & Quality Control) ordinance, 1983; Fish and Fish Products (Inspection & Quality Control) Rules, 1997 (Amended in 2008); Fish Feed and Animal feed Act, 2010; Fish Feed Rules, 2011; Fish Hatchery Act, 2010; Fish Hatchery Rules, 2011

    • SPS matters are handled by the Ministries of Agriculture, Health, and Fisheries and Livestock.


    1 key findings from the first phase of the study13

    1. Key Findings from the First Phase of the Study

    • Ministry of Agriculture

    • For the import of regulated articles: (a) issuance of Import Permit which contains phytosanitary requirements for concerned commodities; (b) compliance with Destructive Insects and Pests Rules, 1966 amended up to July, 1989 and Plant Quarantine Act, 2012; (c) activities at the point of entry including: documentation check, verification of consignment integrity, phytosanitary inspection, sampling, testing and treatment (if required), detention of consignment.

    • Bangladesh has 26 plant quarantine stations/entry points, three of which are located in three international airports, two in seaports, one in a river port, one in an ICD (Inland Container Depot), and the other 19 quarantine stations are located in 19 border land ports.

    • Any plants or plant products whether meeting the Phytosanitary requirement or not must be inspected by the plant quarantine officials before release of the consignment.


    1 key findings from the first phase of the study14

    1. Key Findings from the First Phase of the Study

    • Ministry of Health and Family Welfare (MOHFW)

    • Bangladesh has adopted International Health Regulation (2005) (IHR 2005) of the World Health Organization (WHO) regarding ship sanitation at ports of entry (POE). The procedures include environmental sanitation, ship inspection, and deratting at POE.

    • The Public Health Laboratory (PHL) is responsible for checking the quality of food in order to protect the consumer from unsafe, adulterated or contaminated food as per Pure Food Ordinance, 1959 and Pure Food Rules, 1967.

    • The Pure Food Ordinance and Pure Food Rules contain 107 items of notified food, specified in: (1) milk and milk products; (2) edible oils and oil products; (3) sweetening agents; (4) cereals and their products; (5) starchy foods; (6) non-alcoholic beverages; (7) spices; (8) fruits, vegetables, and miscellaneous products; (9) tea and coffee; (10) bakery and confectionary products; (11) iodized salts; and (12) canned food.


    1 key findings from the first phase of the study15

    1. Key Findings from the First Phase of the Study

    • Ministry of Fisheries and Livestock (MFL)

    • The Bangladesh Diseases of Animals Act, 2005, the Bangladesh Animal and Animal Product Quarantine Act, 2005, and the Bangladesh Wildlife (Preservation) (Amendment) Act, 1974 are the three main legal instruments for keeping Bangladesh free from HPAI/H5N1 in animals and enables the control and eradication of the disease in case of an outbreak. Moreover, the Bangladesh Penal Code (BPC), Bangladesh Customs Act, 1969, and Imports and Exports (Control) Act, 1950 Section 3A, are used for quarantine and import bans.

    • For fish and fish products, SPS standards are governed by Fish and Fish Products (Inspection and Quality Control) Ordinance, 1983 and Fish and Fish Products (Inspection & Quality Control) Rules, 1997 (Amended in 2008).

    • Labelling requirements

    • To protect the interests of the consumer and to maintain a standard labelling system, the Government has promulgated The Bangladesh Standards of Weights & Measures (Packaged Commodities) Rules, 2007 under the Weights and Measures Ordinance, 1982.

    • Accordingly the following declarations have to be made on every package: name and address of the manufacturer and packer; common or generic name of the product with all ingredients; net weight; date of manufacture and date of expiry; retail price of the package.


    Sarso agreement

    1. Key Findings from the First Phase of the Study

    SARSO Agreement

    • The Agreement on the Establishment of the South Asia Regional Standards Organization (SARSO), was signed at 15th SAARC Summit held in Colombo, Sri Lanka on 2nd - 3rd August, 2008, by the Foreign Ministers of the SAARC Member States

    • The Agreement on establishment of SARSO has since been ratified by all Member States with Afghanistan ratifying the Agreement in May 2011.

    • The Agreement on establishment of SARSO has entered into force with effect from 25 August 2011 with issuance of Notification to this effect by the SAARC Secretariat.

    • SARSO is to be located in Dhaka, Bangladesh

    • One of the major objectives of SARSO is to develop SAARC standards on the products of regional/sub-regional interest


    Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

    1. Key Findings from the First Phase of the Study

    Development of SAARC Standards

    • The following products have been identified for harmonization/development of SAARC Standards:

      SugarSkimmed Milk PowderBiscuits

      Instant NoodlesVegetable GheeElectric Cables

      Textile FabricJuteCementSteel TubesStructural SteelToilet Soap

    • Sector based approach adopted for harmonization/ development of SAARC standards with setting up of Sectoral Technical Committees

      Food and Agricultural Products;        Electrical, Electronics, Telecoms and IT

      Jute, Textiles & Leather; Building Materials

      Chemical and Chemical Product

    • Draft SAARC Agreement on Implementation of Regional Standards: The objective of this agreement is to provide the framework as well as the guiding principles for implementation of the SAARC standards

    • Draft SAARC Agreement on Multilateral Arrangement on Recognition of Conformity Assessment: The objective of this Agreement is to facilitate SAARC Member States to accept results of conformity assessment


    Current state of domestic physical connectivity

    1. Key Findings from the First Phase of the Study

    Current State of Domestic Physical Connectivity

    • Length of road has increased considerably

      • But the quality of road (e.g. paved road) remains a concern.

    • In contrast, expansion of rail network was rather slow – indeed, in some instances rail-based transport network had experienced contraction.

    • Air transport network on the other hand has made significant progress particularly in case of freight transport, passenger and departure of carriers etc.

    • Containerisation as a mode of transport of goods has been on the rise globally.

      • Only about 50% container passing though the Chittagong port is containerized, while less than 15% of containers moved inland, mainly by rail and only a few by road or by inland waters are containerised (World Bank, 2013)


    1 key findings from the first phase of the study16

    1. Key Findings from the First Phase of the Study

    • The road transport remains the predominant mode of transport in Bangladesh accounting for four-fifths of total traffic moved.

    • The conditions of internal roads in Bangladesh are not of the quality that corresponds to the Asian Highway standard.

    • The roads are usually classified as ‘primary’, ‘class I’, ‘class II’, ‘class III’ and ‘below class III’. Standard primary roads in Bangladesh are limited in length unlike in neighbouring India and to some extent in Myanmar.

    • The condition of Bangladesh’s roads has improved over time – between 2004 and 2008, 93% of total roads were upgraded to class II level from class III and below class III levels which was only 24% in 2004.

    Condition of Roads: 2004-2010


    1 key findings from the first phase of the study17

    1. Key Findings from the First Phase of the Study

    • Major part of road network of Bangladesh is not suitable to handle modern diversified vehicles (WDI, 2010).

    • The deficiency is more acutely felt in accommodating containers in Dhaka-Chittagong roads which constrain trading activities (BTILS, 2008).

    • Severe congestion is a prominent and permanent feature of highways from Dhaka to other districts.

    • In case of cross-border road connectivity, harmonization of standards signaling system and protocols need to be ensured through signing of Motor Vehicle Agreement.


    Bangladesh in asian highway and trans asian railway

    1. Key Findings from the First Phase of the Study

    Bangladesh in Asian Highway and Trans-Asian Railway


    State of cross border related physical transport infrastructure

    1. Key Findings from the First Phase of the Study

    State of Cross Border-Related Physical Transport Infrastructure

    Condition of Cross-border Roads

    • The road transport remains the predominant mode of transport accounting for four-fifths of total traffic moved

      • Condition of roads has improved over time - 93% of total roads were upgraded to class II level (only 24% in 2004) (see next slide)

        Major Weaknesses in Cross-border Road

    • Two generic impediments are: a) lack of agreement on cross-border movement of goods between Bangladesh and India causes transshipment and b) roads in Bangladesh side was not suitable to take loads over 8.2 axle.

    • Benapole point: limited working hours; no work during week-end; practice of limiting providing clearance for only 300 trucks per day;slow clearance at border points.

    • Brahmanbaria-Akhaura point: poor and narrow road; Banglabandh point: absence of permanent immigration and customs office; Tamabil point: absence of an appropriate agreement causes transshipment;Akhaura-Chittagong point:narrowness and poor condition of the road; Burimari-Mongla point: lack of proper warehousing facilities; JamunaBridge point, about 82 km roads are narrow


    State of cross border related physical transport infrastructure1

    1. Key Findings from the First Phase of the Study

    State of Cross Border-Related Physical Transport Infrastructure

    Major Weaknesses in Railway Transport

    • Broad gauge rail corridors between Bangladesh and India are not active

    • Non-utilisationof available capacity on the Indian side, restriction on movement of commodity specific rolling stocks, inadequate infrastructural facilities for loops holding lines and axle road restriction at Jamuna

    • Mahishahon-Dhaka links: Different types of gauges require transshipment of goods. Rohanpur-Chittagong point: missing link between Akhaura and Agartala, metre gauge section, and capacity constraints in Chittagong port

      Major Weaknesses in Inland waterways

    • Lack of sufficient number of port of calls; old vessels; poor navigational aids; and outdated jetties. Lack of dredging and siltation; lack of appropriate equipments and skilled manpower


    State of cross border related physical transport infrastructure2

    1. Key Findings from the First Phase of the Study

    State of Cross Border-Related Physical Transport Infrastructure

    Major Weaknesses in Maritime Transport

    • Chittagong Port: existing facilities in the port are inadequate; width, curvature and draft of the Karnaphuli River limits the size of the vehicles to enter the port; bottlenecks within the road and rail traffic from the port to the capital city.

    • Mongla Port: Lacks the required container handling equipments; weak connectivity from other parts of the country; lack of economic activities

      Major Weaknesses in Air Transport

    • Poor infrastructure (runways, navigational facilities, ground services, modern amenities etc.), lack of skilled manpower, poor management; inadequate warehouse facility


    Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

    1. Key Findings from the First Phase of the Study

    State of Customs and Trade Facilitation

    • Bangladesh is placed is just above the average of South Asia in most of the indicators related to trade facilitation and customs processes (WB, 2013)

      • Requirement of time and cost is significantly high

      • Better performance in timeliness; poor in terms of customs

        Product-Specific Analysis of Customs and Logistics Condition at the Border Points

    • Import of raw materials from India (cotton fabrics): 10 days; US$415

    • Export of final products to India (garments): both through land and sea ports required four times more time and more than double costs

    • Business process followed with Bhutan and Nepal are lengthy and involve higher costs

    • Majority of operations (about 80% of the documents) involving cross-border trade in South Asia is still carried out through manual processes

    • Customs automation helped reduce the number of documents needed, time required and consignments to be inspected

    • Lack of standard documentary process in land based trade


    6 state of transport administrations and trade facilitation

    6. State of Transport Administrations and Trade Facilitation

    Export and Import Procedures in Bangladesh vis-à-vis Selected Countries

    • Source: http://www.doingbusiness.org/data/exploreeconomies/


    6 state of transport administrations and trade facilitation1

    6. State of Transport Administrations and Trade Facilitation

    Business Process of Selected Products Traded between Bangladesh and India

    • Source: Hossain and Rahman, 2011; Note: * Excludes production time

    • ** Excludes time required by Indian exporter in completing the business process in India

    Business Processes: Requirement of Time and Cost

    • Source: De, 2013


    3 need and rationale for the second phase of the study

    3. Need and rationale for the second phase of the study

    • Existing knowledge on practices of national standards, SPS related rules and regulations, transport facilitation provides indication of concerns, challenges and scopes for undergoing detailed study on agreements on above-mentioned issues

    • A detailed analysis on those issues will provide

      • Better understanding on concerns related to standards and SPS related issues

      • Detailed information about practice of SPS related standards followed by India

      • Understanding as regards differences between the two countries in terms of following standards and SPS related requirements

      • Mutual recognition agreements currently in practice /discussion in other bilateral, sub-regional and regional trade agreements and major focus of those agreements

      • SPS agreements currently in practice in other bilateral, sub-regional and regional trade agreements and their major focus

      • Better understanding on MVAs currently in operation in other bilateral, sub-regional and regional agreements

    • A detailed analysis will help to understand

      • Preparedness of both the countries in terms of requirement of infrastructure, institutional set up, requirement of resources

      • Assessment of resources, time, and institutional aspects necessary for the improvement and changes in rules and regulations and its implementation


    Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

    4.How to/why push the agenda for cross-border transport facilitation and mutual recognition of standards

    • Need to identify offensive and defensive interests in case of issues and concerns related to the possible agreements to be prepared

      • Discussion with key stakeholders including BSTI, ministries and departments monitoring the SPS standards, traders, border authorities, logistic providers

      • Discussion with key stakeholders with regard to MVAs including ministry of transport and communications, road transport authority, private transport organizations, border authorities, logistics providing agencies

    • Discussion with the experts on concerning issues

      • To better understand contextual issues, in-depth understanding technical issues

    • Consult with similar agreements signed by other countries at bilateral, regional and sub-regional levels

      • To appreciate the framework issues, contents and concerns

      • Challenges faced after signing such agreements (e.g. narcotics, illegal movement)

    • Interact with the counterpart institute (CUTS)

      • To get more information about rules and regulations related to standards, SPS and MVAs followed

    • Discussion with the official of ministries/departments involve in SPS, standards and MVA related issues

      • To get their feedback regarding the possible issues and concerns to be addressed in the agreements


    5 the expected outcomes benefits

    5. The Expected outcomes/benefits

    • A draft framework on SPS agreements based on the information to be collected from different sources through interviews and FGDs to be carried out

    • A revised draft on MVA based on the analysis to be undertaken

    • Provide inputs for relevant policies of the government of Bangladesh through dialogues and policy influencing activities

    • Provide a plan of actions for enforcement of the agreement


    6 outline of a model to quantify the benefits accruing from cross border transport facilitation

    6. Outline of a Model to Quantify the Benefits Accruing from Cross-border Transport Facilitation

    Static benefit

    • Reduction of trade cost due to MVA

    • CUTS (2013): Potential savings in MVA reforms

      Dynamic benefit

    • ?


    Assessment of bangladesh india trade potentiality need for cross border transport facilitation mutual recognition of standards

    Thank you


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