Published in New Age on Tuesday, 23 June 2015.
China is keen to forge a bilateral free trade area agreement with Bangladesh to boost trade between the world’s second largest economy and a growing Bangladesh, a senior official of the commerce ministry said.
Department of international cooperation, ministry of commerce, China has recently approached the commerce ministry of Bangladesh to start negotiations on forging the bilateral FTA agreement.
The proposed trade deal, if signed, would expand the two-way commerce manifold and help spur economic growth of the two populous Asian nations, the trade official said, quoting a communication made from the Chinese commerce ministry.
A diplomatic communication made from Bangladesh Embassy in Beijing to commerce ministry last week also highlighted the FTA issue as far as enhanced trade and investments are concerned under the proposed trade deal.
‘The Chinese side showed their keen interest to begin negotiations for an FTA between Bangladesh and China,’ reads the communication.
‘My reading is that China is ready to offer more facilities to reduce the trade gap between the two countries… but due to strict WTO rules, it is handicapped and is trying to find alternatives,’ the commercial councilor at Bangladesh embassy in Beijing said in a message.
Trade officials in the commerce ministry said they would examine the Chinese proposal on bilateral FTA before sitting with their counterparts for negotiations.
‘It is a matter for thorough examination as the issue involves huge revenue implication for Bangladesh economy,’ Monoj Kumar Roy, additional secretary, commerce ministry told New Age.
He said since China was one of the major import source of the country, any FTA would make huge financial sense.
Bangladesh exported goods worth US$ 458.12 million to China in 2012-13 fiscal year against imports worth US$ 6.30 billion.
Bangladesh has been enjoying zero-duty facility for 4,800 items in Chinese market since July 2010 which accounts for 60 per cent of China’s tariff lines. The duty-free scheme is available under the Asia Pacific Trade Agreement or APTA.
n July, last year, Beijing offered to provide duty-free market access for 7,800 products from Bangladesh with enhanced value addition criteria, which the government declined to accept.
The Chinese offer would mean foregoing of trade privileges currently available for around 4,800 products of Bangladesh under the Asia Pacific Trade Agreement or APTA.
A trade expert of the commerce ministry, wishing anonymity, said this government would never forge any bilateral FTA with China as such deal would not only demean revenue income, but also help divert trade from India to China due to the trade liberalization under the proposed FTA.
China in 2006 signed the first FTA agreement with Pakistan in the South Asia region and it now plans to initiate negotiations with Sri Lanka followed by Bangladesh, another senior trade official said.
A good number of countries, including India, Malaysia, Argentina, Fiji, Macedonia, Mali, Mexico, Nigeria, Sri Lanka, Turkey and Venezuela expressed their interests time and again to sign FTAs with Bangladesh.
Khondaker Golam Moazzem, additional research director, Centre for Policy Dialogue, told New Age on Monday that bilateral FTA with China would not be that effective for Bangladesh, as the country already enjoys duty-free facility for its 60 per cent products in the Chinese market.
Rather, the economist said, Dhaka should opt for Economic Partnership Agreement with China, which will foster trade, investment and connectivity.
‘EPA will be more beneficial for Bangladesh than FTA with China,’ Moazzem said.