State Minister for Commerce Ahasanul Islam Titu has said Bangladesh wants to move ahead with China to sign a free trade agreement (FTA) but wants to make sure that the partnership benefits mutually.
"We want to move ahead with FTA. There is no doubt about it. We have to make sure our partnership is mutually beneficial. We have to see what the elements and considerations we need to put in the negotiations," he said at an event late Sunday.
The state minister said Bangladesh is now considering 26 countries to get into different types of trade agreements, including the Comprehensive Economic Partnership Agreement (CEPA), preferential trade agreement (PTA) and FTA.
He was speaking at a seminar titled “China-Bangladesh Free Trade Agreement: A Mutually Beneficial and Win-Win Choice” held at the Embassy of China on Sunday night.
Chinese Ambassador to Bangladesh Yao Wen, chairman of Research and Policy Integration for Development (RAPID) Dr Mohammad Abdur Razzaque, Secretary General of Bangladesh China Chamber of Commerce and Industry (BCCCI) Al Mamun Mridha and President of Chinese Enterprises Association in Bangladesh (CEAB) Ke Changliang also spoke.
Titu said "reciprocity" in some cases is not a favourable word when a developing country negotiates with a developed country.
"Our relationship is getting stronger day by day. The two countries can move forward with a political will for the development of people," he said.
He said generating employment opportunities is the number one priority of his government, and FTA can bring more employment opportunities and more investment in Bangladesh.
"These are the conversations we have.....We want to see our relations become stronger. China is our development partner," he mentioned, adding that they need to look at the relations in a comprehensive way to overcome any impediments."
He acknowledged that they have a huge trading gap and hoped that China would emerge as the largest investment partner in Bangladesh from the next year.
"We want more trade and more investment with China so that we can grow further," Titu said.
Chinese Ambassador Yao Wen said his country stands ready to work together with Bangladesh to announce the conclusion of the feasibility study of the Bangladesh-China free trade agreement (FTA) in the near future.
He said China is ready to strive to officially initiate negotiations within this year so as to conclude the negotiations before 2026, commencing the building of a bilateral free trade zone.
"I am convinced that the early signing of the China-Bangladesh FTA will undoubtedly open a new chapter of mutual benefit and win-win cooperation, ushering in a new golden era of economic and trade cooperation between China and Bangladesh," Ambassador Yao said.
Signing FTAs with other countries is an inevitable choice for Bangladesh to achieve its Vision 2041, said the Chinese ambassador.
What China has experienced demonstrates that signing FTAs with other countries will definitely benefit Bangladesh in the long run, the envoy said.
The FTA serves as a guarantee for the healthy and stable development of bilateral economic and trade cooperation between China and Bangladesh, said Ambassador Yao.
The foundation of economic and trade cooperation between Bangladesh and China is solid, extensive, and diverse.
In terms of trade, China has maintained its position as Bangladesh's largest trading partner for 13 consecutive years, with bilateral goods trade reaching $24 billion in 2023, said the envoy.
In terms of investment, China's FDI stock in Bangladesh reached $3.2 billion by 2023, making China the second-largest investing country in Bangladesh, he added.
In terms of contracting, Chinese enterprises have constructed 7 railways, 12 roads, 21 7 31 power plants in Bangladesh.
The China-Bangladesh FTA covers areas such as trade in goods, trade in service, investment, e-commerce, and high-tech industry cooperation, providing a basic framework and solid guarantee for future bilateral economic and trade cooperation.
"The China-Bangladesh FTA is imperative for the enhancement of bilateral economic and trade. China and Bangladesh are strategic partners, which will be further upgraded in the future," said Ambassador Yao.
However, he said, the only trade and investment agreement between the two countries, namely the Agreement on the Encouragement and Reciprocal Protection of Investments signed in 1996, does not align with the increasingly close relations and exchanges between our two countries.
"What we need is a modernized agreement in line with the current state of bilateral cooperation and the global economic trends," he said, adding that with the China-Bangladesh FTA poised to provide a top-level framework for bilateral cooperation, the economic and trade relations are set to embrace a more sustainable, stable and healthy development momentum.
The FTA will bring significant benefits to Bangladesh, he hoped.
According to the feasibility study report, the overall tariff on goods imported from China to Bangladesh will significantly decrease after the signing of the FTA, leading to a reduction in import prices, said Ambassador Yao.
This will have an immediate effect on alleviating inflation in Bangladesh, he mentioned.
In the long term, the decrease in prices of raw materials for Bangladeshi products will definitely enhance their competitiveness in the international market, laying a solid foundation for Bangladesh to continuously increase its foreign exchange reserves.
The FTA will also make China’s investment in Bangladesh more convenient and efficient, thus making further contributions to creating employment opportunities, upgrading industries, and diversifying exports, Yao said.
Earlier this year, Bangladesh successfully held its general election, the envoy said, adding the utmost priority for the new government is to achieve stable economic development and graduate from the Least Developed Countries (LDC).
"Signing FTAs with other countries is therefore regarded as a crucial way to achieve these goals," said the envoy.
China accelerated the signing of FTAs with other countries after joining the WTO in 2001.
In spite of the fact that China's overall tariff has decreased from 15.3% in 2001 to 7.3% in 2023, Yao said, China's industries have developed rapidly, which had driven China's GDP from $1.3 trillion in 2001 to $18 trillion in 2023, tax revenue from $184.9 billion in 2001 to $2.6 trillion in 2023, and tariff revenue from $10.2 billion in 2001 to $42.5 billion in 2022.
Right now, the envoy said, China is in a new era of advancing the rejuvenation of the Chinese nation on all fronts through a Chinese way to modernization, while Bangladesh is also at a critical stage of graduating from the LDCs and is working hard to realize its Vision 2041.
Bangladesh would be highly benefited if the proposed FTA can be complemented by investment, said Razzaque, chairman of RAPID.
Bangladesh imports more than $21 billion worth of goods from China in a year, and of the amount 40 per cent comes under bonded warehouse facility means duty-free.
Still, the import duty for Chinese goods is more than 28 per cent of the total revenue Bangladesh generates from import tariff, Razzaque said.
Al Mamun Mridha urged the government for holding a Bangladesh Investment Summit in China during the upcoming visit of Prime Minister Sheikh Hasina to China.
Ambassador Yao said Prime Minister Sheikh Hasina's forthcoming visit to China will be "another historical" one opening up a new chapter in Bangladesh-China relations.
"It will be another historical one. It will be a game-changer. It will open a new chapter," he told reporters while responding to a question at the seminar.
"We will know in due time. So let's wait and see," the envoy added.
