'Dumpers' hoist with their own petard

On the international scene there is one proud example of a biter getting bitten. Bangladesh, loudly accused of using what is almost slave labour to produce clothing exports at prices any honest producer can only dream of, is now finding its other local industries being attacked by imports from developed nations. In answer to this, according to commerce minister G M Quader, the government has imposed nontariff barriers. Mainly, he added, to protect “local infant industries”. He also accused other nations of now imposing non-tariff and para-tariff restrictions – as the customs duty rate has now been brought down to an almost zero level following trade liberalisations. Following the same bent, Dr Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD), said many advanced nations were using their trade policy to protect their industries. “The average tariff rate in the USA is less than 3%, but when it imports ready-made garments (which Bangladesh is alleged to be dumping) the tariff is at the level of 16%,” he added. Meanwhile, Nigel Bairstow at B2B Whiteboard is another of the opponents of non-tariff trade barriers. They are another way for a country to control the amount of trade that it conducts with another country, often for selfish purposes, he said. But, he added, any barrier to trade creates an economic loss, which means it does not allow the markets to function properly. Although tariffs have significantly reduced over the last 20 years in global trade, Bairstow suggested that a “bigger concern” was the dismantling of non-tariff barriers “that restrict trade from lessdeveloped countries”. And he also attacked the agricultural sector for its continued protectionist thinking. It has had its high share of discriminatory trade practices to protect inefficient producers, he said. And, putting it briefly, the World Trade Organisation (WTO) said: “In simplest terms, a tariff is a tax. It adds to the cost of imported goods….” Trade barriers, the WTO added, are often created to protect infant industries and developing economies, but are also used by more advanced economies with developed industries. However, it also noted that criticisms of this sort of protectionist strategy revolve around the cost of subsidising the development of infant industries. “If an industry develops without competition, it could wind up producing lower quality goods, and the subsidies required to keep the state-backed industry afloat could sap economic growth." INSERTS 1. 16% The tariff for ready-made garment imports in the US. 2. Cheap exports culprits get some of their own medicine. 3. Tariff = Tax = more expensive imports