Bangladesh's status as a developing nation will continue to grant it duty-free market access for three additional years beyond its graduation from least-developed country (LDC) status in 2026.
This decision was finalised during the 13th World Trade Organisation (WTO) Ministerial Conference in Abu Dhabi, where 166 member nations endorsed the extension after intense negotiations lasting over five days.
Originally joining the LDC group in 1975, Bangladesh's impending departure from this classification in November 2026 raised concerns about losing $7 billion annually in trade benefits due to the erosion of preferential trade agreements.
However, the extension guarantees stability until 2029, providing a crucial buffer for Bangladesh's economy, which was severely impacted by the Covid-19 pandemic and subsequent global crises.
The extension initiative was spearheaded by the LDC group, chaired by Djibouti, which advocated for an additional 12 years of market access for graduating LDCs to mitigate economic shocks. The recent Russia-Ukraine conflict further emphasised the need for sustained support for vulnerable economies.
While the WTO's decision grants relief, it's noteworthy that Bangladesh won't enjoy trade benefits in the US due to the absence of preferential duty programs for LDCs in the country.
Bangladesh's trade landscape heavily relies on LDC-related benefits, with 73 per cent of its exports currently enjoying duty-free access, positioning it as the world's second-largest apparel supplier. The nation stands as the highest beneficiary among 45 LDCs.
However, the extension doesn't address concerns regarding Trade-Related Aspects of Intellectual Property Rights (TRIPs), implying Bangladesh won't benefit from patent waivers for pharmaceutical production post-transition.
Despite the WTO's decision, uncertainties linger regarding whether the European Union will extend benefits beyond the customary three-year grace period typically granted to graduating LDCs. The EU emphasised the importance of enhancing special and differential treatment for all developing countries, signaling a commitment to equitable trade practices.
