The government is trying to sign free trade agreements, preferential trade agreements and comprehensive economic partnership agreements with the major trading partners
Bangladesh has devised a strategy for signing trade deals with major trading partners for retaining duty benefits past its United Nations status graduation from a least developed country (LDC) to a developing one in 2026, according to a government official.
The graduation will turn local exporters ineligible for duty benefits the LDCs get. In other words, duties have to be paid ranging from 8 per cent to 16 per cent depending on the export destination.
So the government is trying to sign free trade agreements (FTAs), preferential trade agreements (PTAs) and comprehensive economic partnership agreements (CEPA) with the major trading partners.
For instance, the commerce ministry recently sent letters expressing interest in signing bilateral FTAs with Japan and South Korea as the two are considered to be promising export destinations, said Tapan Kanti Ghosh, senior secretary to the commerce ministry.
Negotiations are underway to sign a CEPA with India and an FTA with China, he said.
Bangladesh also wants to sign trade agreements with European Union, Singapore, the US and join Regional Comprehensive Economic Partnership (RCEP), a free trade agreement among the Asia-Pacific nations, he added.
Bangladesh should also try to avail extensions of duty facilities under the United Nations while a negotiation is underway for continuation of the facility for another 12 years under World Trade Organization (WTO), Ghosh said.
The local garment exporters should also engage their international buyers, especially the Europeans, to lobby the EU authorities for extension of duty facilities, he said.
This is because the EU is also a great beneficiary of the locally made garment items as Bangladesh exports more than $25 billion worth of garment items to the EU in a year, he said.
Ghosh said the commerce ministry has so far prepared 26 studies on FTAs, PTAs and CEPAs but none can be considered dynamic enough to lead to a deal’s signing.
If Bangladesh becomes a higher-middle income country in 2030, negotiations for obtaining GSP Plus to the EU market will not be needed as the EU does not allow the facility to such countries, said the senior secretary.
Ghosh was speaking at a national workshop organised by the commerce ministry at Parjatan Bhaban in Dhaka on a proposed time-bound action plan of two LDC graduation related sub-committees.
Government high-ups, experts, businesspeople, exporters and researchers participated at the workshop.
Commerce Minister Tipu Munshi said the LDC graduation was a matter of joy and pride and also of concern for some of its accompanying challenges for local exporters and businesses.
“We have to take serious preparations right at this moment to offset the shocks of LDC graduation challenges,” he said.
Munshi also said when the commerce ministry wants to go for serious negotiations for signing any deal, the National Board of Revenue (NBR) objects, saying that revenue collection would fall drastically if it involved some countries.
Ahmad Kaikaus, principal secretary to the prime minister, suggested private sector entrepreneurs play a bigger role.
If market access is attained yet there is not enough products for export, there is no use for such duty facilities, he added.
Kaikaus suggested for skills building in different sectors so that the country could use the human resources in the time of need.
FBCCI President Md Jashim Uddin said currently the average speed of goods laden trucks on the Dhaka-Chattogram highway is 40 kilometres per hour, which should have been 80 km per hour.
Bangladesh also needs to improve the efficiency of its ports and minimise skills gaps, he said.
Sharifa Khan, member (secretary) to the Agriculture, Water Resources and Rural Institutions Division of the Planning Commission, said it would not be wise to withdraw government subsidies all on a sudden with the graduation.
She also suggested for improving the services sectors.