The Trade Liberalisation process and the Structure of Protection in Bangladesh

There has been a significant shift in trade policy orientation in Bangladesh over the last two decades. A dirigiste policy orientation has gradually been replaced by a more outward oriented economic policy. In line with such policy orientation, a series of trade liberalisation measures has been introduced marked by occasional reversals in the policy direction. Tariffs still remain the main instrument of protection for import competing industries while export oriented industries are accorded various forms of subsidy. While any direct involvement of the government in trade has been reduced, there still exist significant regulatory controls and administrative discretions in influencing the flow of imports. The paper argues that a more uniform incentive structure will enable the country to adjust to the changing global economic environment and help expand its production and export base.