How does the outcome affect Bangladesh?

Two views on impact
One view has been that the Hong Kong document did not follow the Geneva text wherein all WTO-member Least-Developed Countries ( LDCs) including Bangladesh would be able to get duty and quota-free access for all products to all countries. At the end, Bangladesh has lost out in the deal as its export of textiles, and leather and vegetables are most likely to come within the ambit of 3 per cent of negative list of products. This will hurt Bangladesh the economy.

They argue that the failure of Bangladesh to get the access for textiles, according to a think-tank in Dhaka, was not to anticipate adequately the opposition from some key countries against Dhaka's bid for duty and quota-free access for its textiles. This implies that skilful negotiation before and during the meeting with key countries would have borne fruitful result.

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The other view appears to be that Bangladesh's textiles quota exclusion manifests robust existence of highly competitive entrepreneurs and good investment climate in the country due to pragmatic macro-economic management. There seems to be no justification for the doom and gloom scenario for Bangladesh out of the Hong Kong deal. Bangladesh has often in the past frustrated the doomsayers by manifesting its inherent capability to overcome impediments in an unsuspected and surprising way.

To substantiate their view, they argue that in four months of this current financial year, the country earned $3.3 billion by exporting goods, showing a 12.47 per cent rise. The knitwear export grew by 26 per cent and the export of woven garments showed a positive growth. The country also earned $13 million in export of textile fabrics during the period, registering a growth of 127 per cent among the different export items.

Furthermore, the Commerce Minister who led the country's delegation to the Hong Kong meeting said on arrival in Dhaka that Bangladesh's position on export products would be clear after two follow-up meetings in Geneva and Washington to be held next year.

There is a time gap between now and 2008 for Bangladesh to consider strategies to make the best out of the deal.

Bangladesh during the last fifteen years has made sound progress in social and economic sectors. The private sector in the country has been imaginative and captured global markets in highly competitive fields. On average, exports grew at 15 per cent per year during the last 15 years. The services sector currently constitutes two-thirds of the economy, while the industrial sector has increased to 15 per cent. The World Bank, the Asian Development Bank and Goldman Sachs have given a "good certificate" to our economic success.

Given the continuing economic and social progress of the country, it is likely that in near future, Bangladesh may graduate from the LDC list of countries. Bangladesh has come to confront the reality of open market and tough competition in the global market.

Real issues for Bangladesh
Bangladesh's economic base is very narrow. It should not depend on exports of a few products. Nearly 76 per cent of its total exports consist of textiles including ready-made garments and knitwear.

The export products need to be diversified. Many observers suggest agricultural processed food is an area that could be one of the main export products to Europe, Asia, and Africa

Although export diversification has often been promoted over the last two decades, it seems that except for ceramics and pharmaceuticals, no successful diversification has taken place.

There are two primary reasons that face impediments in export diversification. One is weak infrastructure including inadequate supply of electricity to industries and the other is bureaucratic rules and regulations that breed corruption.

Recently, the visiting British Minister for International Development has posed appropriate questions: "Why is it that in Bangladesh it takes 6 to 7 days to turn around a ship, compared to 6 to 7 hours in Singapore? Why does it take 38 signatures to import items into Bangladesh but only 2 in Singapore?"

Although Bangladesh private sector is vibrant and could easily pick up export opportunities, the government needs to address the bottlenecks, raised above by the British minister, in an increasingly globalised world, where speed is the driving force of progress and prosperity

Hong Kong: Betrayal of poorer countries?
Lobby groups said the meting ended with a deal that left the poorer countries out of the loop and the outcome seems to benefit the rich industrialised and middle-level developing countries

The anti-globalisation agencies condemned the compromise deal as a betrayal of the poor countries who were supposed to benefit most from the Doha Round. The anti-poverty campaign group dismissed the likely impact of ending EU export subsidies and US cotton export subsidies, not domestic subsidies to their farmers.

The International Confederation of Free Trade Unions (ICTFU) said that the fact that rich countries would be able to protect key products, such as textiles, was a disastrous result for poorer countries.

Oxfam trade campaign chief Phil Bloomer said that, "This is a profoundly disappointing text and betrayal of development promises. Rich country interests have prevailed again."

Conclusion
The wording of the 19-page Hong Kong WTO Statement is very expansive and sets out only policies. There are many complex details that were left out deliberately at the Hong Kong meeting to make it a success. They need to be thrashed out next year and the devil is always in the details. The WTO member-states aim to complete a final deal at the end of 2006 in order to start a new global trade regime in 2008.

When compromise takes place, each one has to give something away in exchange for another gain, and that is the bottom line of compromise. That is why no one country seems to be happy in the compromise deal in Hong Kong.

Barrister Harun ur Rashid is a former Bangladesh Ambassador to the UN, Geneva.