Bangladesh yesterday sought withdrawal of the 17.5-percent duty on garment exports to Turkey as the tax measure has hit the country's sales to the European nation, officials said.

The call came at the opening day meeting of the Fourth Bangladesh-Turkey Joint Economic Commission at the Economic Relations Division (ERD) in the city.

Finance Minister AMA Muhith, who co-chaired the opening session of the meeting, told reporters that he also raised the duty issue in a meeting with the 15-member Turkish delegation led by its Labour and Social Security Minister Faruk Celik.

Turkey will also give Bangladesh a $300 million credit for oil import, the finance minister said.

"Our garment export [to the country] has gone down because of the duty. The issue will be discussed at the commission's meeting," Muhith said.

He said, following the imposition of the tax measures, which came effective in July last year, the eagerness of Bangladeshi trade bodies faded a bit about the export potential to the Europe's one of the growing economies.

"We had thought that people-to-people contact will expand following the opening of the air-link. But it has not happened," said Muhith.

Ankara imposed the duty on import of garment items from developing countries, which was zero earlier, as a temporary measure to protect its local industry.

Bangladesh exported knitwear products worth $124 million and woven items worth $231 million in 2011-12.

The sales of knitwear items were, however, $272 million and woven items were $245 million in 2010-11 in the export basket of $518 million, according to the Export Promotion Bureau (EPB).

The country's apparel exports to Turkey fell by 9.21 percent to $90.72 million in the July-September period of the current fiscal year, according to the EPB.

The Turkish side said the two countries would have to sign a free trade agreement (FTA) before Ankara could withdraw the tax measure for Bangladeshi garment exporters.

Turkey is now trying to get the membership of the European Union. So, the country will require permission from the European Commission if it wants to sign the FTA, said the Turkish side.

The two sides will discuss further on the issue today, according to an official who attended the meeting.

Muhith also said the two-day meeting aims to cement both political and economic ties.

"We have both deep political and economic relations with Turkey. We have talked about various needs for cementing our relations."

He said there are exchanges in the education sector. Protocol is needed here for equivalence, said Muhith who led the Bangladesh side in the meeting.

Muhith said, under the $300 credit line from EXIM Bank of Turkey offered to Bangladesh for oil import, there is a need to fix a counterpart bank in Bangladesh to use the credit.

State-run Bangladesh Development Bank Ltd might be chosen as the counterpart bank, he said.

At the meeting, the government also sought opportunity to export its good quality pharmaceutical products to the country, as Bangladesh's manufacturers are already shipping drugs to 83 countries in Europe, Latin America, Asia and Africa and have surplus capacity to cater other markets.

The two sides also discussed formation of joint trade committee, preferential trade agreement under Developing-8 bloc, investment, Turkish official

assistance to Bangladesh, manpower export, food security, health, shipbuilding, water management, energy, civil aviation, tourism, small and medium enterprises, agriculture, fisheries and livestock and cultural cooperation.

Emine Sendil, deputy director general (agreement) of Turkey, and Arastoo Khan, additional secretary to the ERD, led the technical sessions of the meeting.

News: The Daily Star/Bangladesh/12-Nov-12