Bangladesh, India will sign free trade deal

[Shakib]

Bangladesh, India will sign free trade deal



Bangladesh has agreed to ink the Comprehensive Economic Partnership Agreement (CEPA), a free trade agreement that will boost economic ties between the two countries, with India.

The announcement was made by Commerce Minister Tofail Ahmed at a press conference today after a meeting with visiting Indian delegation led by his counterpart Suresh Prabhu in Dhaka.

Suresh Prabhu assured that India, upon request of Bangladesh, is working to withdraw the anti-dumping duty on Bangladesh's jute and jute-made products.

Also, the two countries will be implementing six more border haats, an initiative dubbed by the World Bank as exemplary steps to regional trade, along bordering areas of the two countries. Notably, Bangladesh's trade gap with India is heavily lopsided towards India. According to statistics, last fiscal, the gap was over US $7.7 billion.






Future of free trade agreements

The future trade benefits of Bangladesh will largely depend on bilateral free trade agreements (FTAs) as the country may lose duty-free facilities once it graduates to a middle-income nation by 2021, experts say.



Currently, Bangladesh has taken initiatives to sign FTAs with several countries including China, Bhutan, Thailand, Turkey, Malaysia and Sri Lanka, Nepal and also interested to sign free trade agreement with India. Experts hope that Bangladesh's trade gap with these countries would become reduce if they sign free-trade agreements. FTAs expected to be signed with the Asian countries will boost both investment and trade.

FTAs are designed to reduce the barriers to trade between two or more countries that are in place to help protect local markets and industries.

Trade analysts said Bangladesh should consider two things while signing an FTA: identifying the priorities of the negotiating country and assessing agendas that are negotiable from the perspective of offensive and defensive interests.

Without FTAs, Bangladesh will lose competitive advantages to other countries, such as India, Pakistan and Vietnam, which have FTAs with a number of countries, the experts said.

Desirous of expanding trade and strengthening economic relations between the two countries on the basis of equality and mutual benefit;
Have agreed as follows:



1. The two Governments recognizing the need and requirement of each other in the context of their developing economies undertake to explore all possibilities, including economic and technical cooperation, for promotion, facilitation, expansion and diversification of trade between the two countries on the basis of equality and mutual benefit.

2. The two Governments agree to take appropriate measures in accordance with the evolving international trading system for mutual benefit of developing countries and least developed countries in so far as such measures are consistent with their individual, present and future development, financial and trade facilitation.

3. The two Governments agree that expansion of their mutual trade exchanges would make an important contribution towards their development. To this end, they agree to take appropriate and special measures during periodic reviews taking into account the asymmetries between the two countries with a view to augmenting and diversifying their mutual trade specially in respect of specific products as may be agreed upon.

4. All payments and charges in connection with trade between the two countries shall continue to be effected in freely convertible currencies in accordance with the foreign exchange regulations in force in each country from time to time.

5.Imports and exports of commodities and goods produced or manufactured in India or Bangladesh, as the case may be, shall be permitted in accordance with the import, export and foreign exchange laws, regulations and procedures in force in either country from time to time taking into account asymmetries between the two countries.

6. Each Government shall accord to the commerce of the country of the other Government, treatment no less than that accorded to the commerce of any third country.

7.The two Governments agree to make mutually beneficial arrangements for the use of their waterways, roadways and railways for commerce between the two countries for passage of goods between two places in one country through the territory of the other.

8.In order to facilitate the implementation of this Agreement, the two Governments shall consult each other at least once in a year or earlier as and when necessary, and shall review the working of the Agreement with special attention to the asymmetries between the two countries.




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