Establishment of the wto and Challenges for the Legal System of Bangladesh

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MqJBL (2006) Vol3

Establishment of the WTO and Challenges for the Legal System of Bangladesh
Mohammad Monirul Azam*

I Introduction
The setting up of the World Trade Organization (WTO) was agreed to by 125 countries on 15 April 1994 at a conference in Marrakesh which concluded the strenuous Uruguay Round of General Agreement on Tariff and Trade (GATT) negotiations after more than seven years of hard bargaining.1 The WTO replaced the earlier GATT, had come into effect from 1 January 1995 with the backing of at least 85 founding members including Bangladesh. Bangladesh did not face any obstacles to become the member of earlier GATT and thereafter of the WTO. Just after its independence in 1972, Bangladesh became member of the GATT on the recommendation of the Great Britain as a member of the Common Wealth countries.2 Again, Bangladesh has become member of the WTO and is considered as the original member automatically as per article XI(1) of the agreement establishing the WTO.3
It is widely anticipated that the entry into the WTO will speed up the economic development while providing foreign investors free access to domestic markets and for more favorable environment for our export-oriented industries. However the accession to the WTO raises some potential legal challenges and to take the full advantage of the world trading system, implementation of the WTO agreements is a must. Although presently Bangladesh has around 1200 laws, which are more than even many developed countries, most of them are century old and lack effective enforcement mechanisms.4 Article XVI(IV) of the Agreement establishing the WTO (hereinafter referred to as WTO agreement) provided that each member shall ensure the conformity of its laws, regulations and administrative procedures in line with the agreements of the WTO. Again as per Article XVI(V) of the WTO agreement reservation is not allowed. It’s a complete package, either one have to accept the whole or reject the whole, there is no provision for the partial implementation.
Therefore, present legal system of Bangladesh will have to be reorganized at every level to satisfy the requirements of the WTO. To meet this purpose, legal, administrative, and judicial resources must be put into place to act as efficient and integrated whole for the effective implementation of the WTO agreements and to minimize the conflicts with other WTO members. The key to success lies in the establishment of a legal system that protects investor’s rights and our national interest as well. When such a system is in place, only then foreign investors and multinational and transnational corporations will be interested to invest here and thereby Bangladesh could attract more foreign direct investment (FDI) and could be able to extract the benefits of the multilateral trading system.
Although Government of Bangladesh has either amended or repealed a number of laws, till date there is no systematic study so far, within the knowledge of this writer, to examine the legal system of Bangladesh in line with WTO obligations.5 Someone may think that it is not necessary, but to take the benefits under the WTO agreements and to identify and face the threat, if any, against the national interest in the WTO agreements, a systematic study is a must.6 Most of the WTO members already conducted this kind of study and have already made amendments to their exiting laws to conform to the WTO-rules. For example The State Council of China after its accession to the WTO has examined all the administrative regulations passed prior to 2001, and has already abolished 221 regulations. China within a very short span of time (officially became a member of the WTO on 11 December 2001) has modified laws, regulations, and rules governing areas such as foreign investment, customs, intellectual-property protection, foreign trade, foreign exchange, and insurance etc. China has reviewed over 2,500 pieces of WTO related legislation and based on this review, 830 laws were repealed, 325 laws were amended and 118 new laws were enacted as of 8 January 2004.7
The subject of multilateral trading system and challenges for compliance with the WTO system nationally and internationally has generated an intense academic interest and has already produced an enormous amount of literature. In Bangladesh, although a number of books, articles and reports made by a number of renowned authors, researchers and research organizations respectively, most of the study and reports highlighted the economic dimension. However, a few articles while making the economic study referred to the trade policy and legal policy measures. But all these articles limited to only investment laws, textile and clothing sector and import and export policy related matters.8 Therefore, this article tried to make a unique contribution in this field by making a study on the challenges for legal reforms and indicating the areas of reforms.
This article is divided into a number of sections. Section II after introduction has given rationale for the study, Section III makes a brief overview on the functions and principles of the multilateral trading system as espoused under the WTO provisions, Section IV includes the conflicts of interest with the developing countries in the WTO and finally Section V proceeds to identify a few areas under the legal system of Bangladesh, where it has to introduce change and thereafter a brief notes on the challenges ahead for legal reforms in Bangladesh while implementing the WTO agreements.
II Rationale for the Study
As mentioned earlier, although a wide array of literature is available on the multilateral trading system and related WTO agreements, most of these are confined to economic issues and a small number of articles just indirectly glossed over the trade policy and legal policy issues rather than issues of legal reforms and challenges for legal reforms. Therefore, this article would be a unique contribution in this field by identifying the major area of reforms and articulating the challenges ahead for legal reforms. In fact, no WTO member could escape the agenda of legal reforms and every member has to introduce changes in its legal system in line with WTO agreements. But before introducing the reforms one has to settle following questions:

  1. How far existing laws in the country are adequate to meet the requirements of WTO system?

  2. Which areas of laws, the country concerned needs to reform urgently/on the priority basis?

  3. How far reforms in line with the WTO agreements are compatible with national interest?

  4. Whether the country will proceed to enact new laws or mere change or amendment of existing laws is adequate?

  5. How far existing Judicial and Administrative bodies and Staffs are qualified to apply and understand the changes of laws in line with WTO requirements?

  6. What are the challenges or obstacles (if any) faced by the country while implementing the WTO agreements?

No existing literature so far has dealt with above-mentioned questions, which needs immediate attention for introducing legal reforms in Bangladesh for the successful integration with the multilateral trading system. This article will try to settle the above-mentioned questions and will identify the major areas of laws that require urgent reforms and challenges faced by Bangladesh while introducing the reforms.

III A Brief Overview on the WTO Provisions
Understanding of the functions and principles of the multilateral trading system is vital for introducing legal reforms for the successful integration of the country with that system. Therefore, before making any assessment of which areas of legal reforms are significant for Bangladesh and challenges (if any) for introducing legal reforms, it is better to make a brief overview on the WTO provisions relating to the functions and principles of the multilateral trading system.
Directory: journals -> MqJlBLaw -> 2006
2006 -> The Song Remains the Same’ – The Status of the Rule of Law in China at the 5th Year Anniversary of wto membership
MqJlBLaw -> Foreign Investment in China: The Cross-Cultural Dilemma
MqJlBLaw -> Financial Adaptation Challenges for the Insurance Industry due to Climate Change
MqJlBLaw -> Board Structure and Board Composition in Australia and Germany: a comparison in the Context of Corporate Governance
MqJlBLaw -> Beyond the Nation State: Corporate Governance in Transition
MqJlBLaw -> Welcome to Europe – An Introduction to eu law for Businesses
MqJlBLaw -> Insuring Against Terrorist Attacks
MqJlBLaw -> A principled Approach to Reward Loyalty: An Argument for Code of Conduct Principles to Remedy the Contractual Unfairness and Legislative Confusion in Loyalty Programs
MqJlBLaw -> Are Chinese Consumers Winners or Losers under wto membership?
2006 -> There was Movement at the Station for the Word had Passed Around: How Does a Company Possess Inside Information under Australian Insider Trading Laws?

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