Following the lingering negotiations for long 20 years, Bangladesh and Bhutan are going to sign the historic Preferential Trade Agreement (PTA) in December—the month of victory.
The PTA will ensure duty and quota-free market facilities for Bangladeshi goods in Bhutan — both are members of the South Asian Association of Regional Cooperation (SAARC).
Following the signing of the trade pact with Bhutan, which recognized Bangladesh on December 6, 1971 as an independent and sovereign country, PTAs will be signed with India, China, Iran, Sri Lanka, Cambodia, Nepal, Indonesia, Malaysia, Saudi Arabia, UAE and Turkey in phases, according to an official of the Ministry of Commerce.
It is learned that the government has examined the possibility of signing preferential and free trade agreements with 11 countries. There has been a positive response from all the countries. There has been a lot of progress on the signing of PTA with Bhutan as well as Nepal. The issue of signing FTA with Indonesia has made significant progress. After that agreements will be signed with other countries. In this context, the Secretary of Commerce Dr Md Jafar Uddin, said that Bangladesh is going to sign the first PTA with Bhutan. To this end, the Ministry of Law has completed the verification and selection of the agreement.
It is learned that the biggest advantage of such agreement is to export goods with duty-free facilities. In addition, such agreements increase domestic and foreign investment and create employment opportunities.
Bangladesh will graduate from the LDC into middle-income country in the next two years. For this reason the tariff benefits available from the World Trade Organization on imports and exports will no longer be in force after 2024. For this reason, if the LDC fails to decide what to do after the transition, economy of Bangladesh may face a huge challenge, Ministry of Commerce sources said.
Twenty years ago, the government has taken various initiatives so that Bangladesh would not fall into the trap of middle income in the future and also to strengthen its own economic position. The initiatives included attempts to enter into agreements such as the FTA and PTA with various countries.
All preparations have been made to sign the first PTA with Bhutan in early December, the month of victory. The historic PTA will be signed in a virtual meeting on December 6 in the presence of Prime Minister Sheikh Hasina and her Bhutanese counterpart Lotte Shering. PTA will allow Bangladesh to export 100 products and Bhutan 34 products duty free.
The two countries will be able to increase the number of products to export in different phases of the negotiations. PTA with Bhutan will increase export of jute and jute products, leather products and shoes, fans, dry cell batteries, watches, potatoes, condensed milk, cement, toothbrushes and other products from Bangladesh.
On the other hand, Bhutanese oranges, apples, ginger, fruit juice, stones, wood, limestone and other products will be imported to Bangladesh. Bhutan's stone has been able to play an important role in the development of Bangladesh's infrastructure.
In this context, the Research Director of the Center for Policy Dialogue (CPD), a private research organization Khandaker Golam Moazzem said that FTA and PTA are very important in expanding exports among the foreign countries.
As a result, if Bangladesh wants to enjoy the zero duty facility now enjoying as an LDC, it will have to sign free trade agreements with the countries concerned and preparations should continue in this regard, he also said.
Commerce Minister Tipu Munshi told The Business Post that Bangladesh has historical ties with Bhutan as it is the first country to recognize independence of Bangladesh. The PTA will be signed in the month of victory thereby strengthening the relationship.
He also informed that Prime Minister Sheikh Hasina had shown personal interest in signing the agreement. For this reason the PTA was approved at the cabinet meeting in last September.
All the formalities have been completed to make the deal. Hopefully, Bangladesh will have the first PTA agreement with Bhutan, he pointed out.
It is learned that a letter has been sent to the Principal Secretary to the Prime Minister for finalising the date of signing of the PTA in the presence of the Prime Ministers of Bangladesh and Bhutan.
According to the letter from the Ministry of Commerce, Bhutan first recognized Bangladesh as an independent and sovereign state on December 6, 1971. The two countries have friendly social, political and economic relations. In order to strengthen this relationship, draft of the Bangladesh-Bhutan PTA was approved at the cabinet meeting on 14 September 2020 with the directive and determination of the prime minister. Approved copy of the draft PTA was sent to the Bangladesh Embassy in Bhutan. The Commerce Secretary also instructed the Ambassador of Bangladesh to Bhutan over telephone to inform the Ministry of Commerce about the modalities of signing the PTA with the appropriate Bhutanese authorities considering the restriction in movement due to Covid-19 pandemic.
In the call-on meeting with the Ambassador of Bhutan in Dhaka on 1 October 2020, Commerce Secretary of Bangladesh also verbally informed about signing the PTA between Bangladesh and Bhutan on 6 December 2020 considering it as an important day. The Prime Minister of Bangladesh and the Prime Minister of Bhutan will be present at the signing ceremony of the agreement. The Minister of Commerce of Bangladesh and the Minister of Economic Affairs, Regional Trade and Industry of Bhutan will sign the agreement virtually on behalf of their respective countries at the same time. The signatures of both the ministers will be preserved in the copy by sending it to the diplomatic channel later.
Preparations are being made to reap more benefits from FTA and PTA by utilising the experience of SAPTA and APTA. With the graduation from LDC after 2024, there will be no opportunity to take advantage of the market without such an agreement. After long negotiations and meetings with various countries over the last twenty years, it has been finally possible to reach a consensus for signing such an agreement with Bhutan.
In the 2012-13 financial year, trade volume between the two countries was about two and a half crore dollar. Now, it has risen to about six crore dollars. Experts believe that the bilateral FTA and the PTA will open a new horizon for both the countries and address the challenges pertaining therein. For this reason, such agreements will be signed with many countries of the world.
According to the Ministry of Commerce and the Bangladesh Tariff Commission, Bangladesh has trade with more than 200 countries around the world. Of these, there is a trade deficit with 61 countries. The government has initiated FTA and PTA signing with different countries to reduce this huge deficit.
ask/wi
