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Indonesia has initiated a safeguard investigation regarding its import of apparel products that may negatively affect Bangladesh’s export of the products to the Southeast Asian country.
Indonesian Safeguards Committee of the ministry of trade on Friday notified the issue to the World Trade Organisation.
The committee said that it initiated the investigation regarding the import of the articles of apparel and clothing accessories following an application from the Indonesia Textile Association for a safeguard measures against the import of the products.
The move, though not any country-specific, came at a time when both Bangladesh and Indonesia are in negotiations to enter into a preferential trade agreement (PTA).
The next round of negotiations will be held in October 21-22. The two countries are scheduled to hold meeting today on the rules of origin issue for the PTA.
The latest development may affect the negotiation process as well as Bangladesh’s export to the country if Indonesia finally imposes any safeguard duty after the investigation is completed, trade experts and exporters said.
Bangladesh in the last fiscal year 2019-2020 exported readymade garment products worth $27.91 million to Indonesia, which is more than 54 per cent of the country’s total export of worth $51.42 million to Indonesia.
Of the $27.91 million, the value of knitwear products export was $14.48 million and the amount of woven export was $13.44 million, according to Export Promotion Bureau data.
According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry.
During a safeguard investigation, importers, exporters and other interested parties may present evidences and views and respond to the presentations of other parties, it stated.
A WTO member may take a safeguard action such as the restricting of imports of a product temporarily only if the increased imports of the product are found to be causing, or threatening to cause, serious injury to the local producers, according to the WTO.
Evaluating the application of the association, Indonesia in its notification said that there was a sufficient evidence to justify the initiation of a safeguard investigation.
The products that fall under the investigation include overcoats, suits, shirts, blouses, t-shirts, singlets and other vests, jerseys, pullovers, cardigans, babies’ garments and clothing accessories, other made up clothing or parts of garments, jackets, blazers, trousers and some other items.
A senior trade official on Sunday told New Age that though the safeguard investigation was not any country-specific move, it would create trouble in the PTA negotiation process.
There is no provision in the draft PTA of excluding Bangladeshi products from such types of duties, he said.
Signing a PTA will not bring any expected outcome for Bangladesh if such duty is imposed as RMG products dominates the Bangladesh’s export to Indonesia, he said.
The commerce ministry and the Bangladesh Trade and Tariff Commission will work on the issue, he added.
Replying to a question whether Bangladesh’s apparel export would be affected if Indonesia imposes safeguard duty after investigation, Bangladesh Garment Manufacturers and Exporters Association Rubana Huq said, ‘Every bit counts.’
She said that it was important to have the ASEAN as a market, which is projected to grow into the 4th largest economy by 2030.
It is also important to explore fashion wear suited for the Muslim population in Indonesia, she said.
So, for the sake of both market and diversification, Bangladesh should not lose focus on the ASEAN market, she added.
According to the Indonesian notification, stakeholders having substantial interests and interested parties in this investigation should submit written request within 15 days from the date of initiation October 1.
(NA)
