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GATT and WTO Course: MKT 417 Faculty: Samy Ahmed

GATT and WTO Course: MKT 417 Faculty: Samy Ahmed. Origins of GATT. • General Agreement on Tariffs and Trade (GATT) • Established after WWII in 1947 – Goals: • Reduce tariff and subsidies and thus facilitate trade in manufactured goods • No “Beggar thy neighbor” policies

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GATT and WTO Course: MKT 417 Faculty: Samy Ahmed

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  1. GATT and WTO Course: MKT 417 Faculty: Samy Ahmed

  2. Origins of GATT • General Agreement on Tariffs and Trade (GATT) • Established after WWII in 1947 – Goals: • Reduce tariff and subsidies and thus facilitate trade in manufactured goods • No “Beggar thy neighbor” policies • 120 members to date • Tariff rates reduced from 45% to 3.9% on an average

  3. 1980-1993: Problems in theWorld Trading System • Japan’s sudden economic rise • High Trade Deficit (thus high unemployment) in the U.S • Bilateral Agreements between member countries

  4. 1986: The Uruguay Round • Renewed negotiations • WTO is created in 1995 • WTO has 145 members including China the newly joined one • Differences b/w GATT & WTO: – GATT is an agreement and WTO is an organization – WTO encompasses services in addition to manufactured goods – Has the authority to impose sanctions

  5. Important topics of the UruguayRound • Tariff on industrial goods to be reduced to less than 4%, particularly by developed countries • Agricultural subsidies to be reduced Substantially • Creation of WTO to implement GATT • Creation of WTO’s services agreement GATS (General Agreement of Trade in Services) and Intellectual Property Agreement TRIPS (Trade Related Aspects of Intellectual Property Rights)

  6. Export Policies of Bangladesh

  7. Strategies for Thrust Sectors 􀁺 For Promotion of high value added leather and leather goods export 􀁺 For promotion of export of shrimp 􀁺 For promotion of export of jute and jute goods 􀁺 For promotion of export of tea

  8. Strategies for Thrust Sectors(Contd.) 􀁺 For promotion of export of agro-based Products 􀁺 For promotion of export of electrical and electronic goods (Including computer software and data entry) 􀁺 For promotion of export of engineering consultancy and other services and subcontracting

  9. Fiscal Incentives: Some highlights 􀂃 Utilization of Foreign exchange by Exporters 􀁺 Can retain 40% in FC accounts 􀁺 For services and consultancies, 7.5% can be retained 􀁺 Utilized for participation in Trade fairs, establishment of overseas offices, business trips etc

  10. Fiscal Incentives: Some highlights 􀂃 International Credit Card 􀂃 Limit of Export Credit 􀁺 Can obtain 90% of LC value 􀂃 Income Tax rebate on export earnings 􀁺 50% rebate allowed from taxable income on export oriented companies 􀂃 Reduced rate of AIT (Advanced Income Tax at source) 􀁺 Usually it is 2.5% for importers 􀁺 For export earnings it is 0.25%

  11. Fiscal Incentives: Some highlights 􀂃 Payment of Duty Drawback through Commercial Banks 􀂃 Duty free import of capital machinery 􀂃 VAT refund on packaging material 􀁺 For jute bags used

  12. Fiscal Incentives: Some highlights 􀁺 Permission for sale of goods rejected for exportation • 20% of rejected goods upon paying of duty 􀁺 Reduced Airfreight for perishable Items 􀁺 Settlement of Trade Disputes • Export Promotion Bureau (EPB)

  13. Fiscal Incentives: Some highlights 􀁺 Ceiling for sending Export Samples • Previously was TK 1,000/- max. • Now its US$ 2,000 􀁺 Establishment of World Trade Center 􀁺 Establishment of International Trade Center

  14. List of items prohibited for export 􀂃 Petroleum and petroleum products 􀂃 Edible oil 􀂃 Jute seeds 􀂃 Wheat 􀂃 Live animals and all sorts of skins of animals mentioned in the Wildlife Protection Ordinance

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