FTA with Bangladesh in the offing | Page 2 | Sunday Observer

FTA with Bangladesh in the offing

Riaz Hamidullah
Riaz Hamidullah

A Free Trade Agreement (FTA) between Sri Lanka and Bangladesh is in the offing with negotiations between the two countries to begin towards the end of the year, the Bangladesh envoy to Sri Lanka said at a trade seminar in Colombo on Thursday.

A trade agreement between the two South Asian neighbours has been on the cards for some time, with the heads of both countries expressing interest at various occasions, to proceed on the agreement. However, there has not been any discussions in regard to an agreement so far.

“There is immense scope for trade between Sri Lanka and Bangladesh to be at a better position than what it is today, as both countries share many similarities being in the same region,” High Commissioner of Bangladesh to Sri Lanka Riaz Hamidullah said.

Speaking further at the ‘Bilateral Trade between Sri Lanka and Bangladesh’ seminar organized by the National Chamber of Commerce last week, he said after the joint study between the two countries is completed, negotiations will commence towards the end of the year. A joint study between Sri Lanka and Bangladesh to look at the scope, potential sectors and capabilities is being carried out according to the High Commissioner. A broad framework for a FTA between the two countries was reached mid last year with meeting of the Heads of State of both countries.

“The FTA will not be confined to trade in goods but also services,” the High Commissioner said.

However, according to those already trading with Bangladesh, several trade barriers such as border congestion need to be addressed before embarking on a FTA.

“Customs barriers and transportation issues which takes a lion share of the time to get goods to the destination, need to be looked into for smooth trade between the two countries,” a merchant said.

While certain issues pertaining to trade between the two countries are to be taken up at the Sri Lanka-Bangladesh Business Co-operation Council, the High Commissioner also assured to take up the matter at a high level to boost trade between the two countries.

Although trade between Sri Lanka and Bangladesh has grown in terms of volumes, it is not at a satisfactory level. Trade between the two countries reached around US$ 142 million in 2016 compared to US$ 131 million recorded in the previous year.

Sri Lanka’s exports to Bangladesh comprise cotton, mineral oil, textiles, chemical products, rubber products, tea, and paper products, while imports from Bangladesh include pharmaceutical products, apparel, jute bags, and vegetables.

According to the Asian Development Bank, Bangladesh’s economy grew by 7.1% in 2016, the fastest growth in 30 years. Garment exports are the backbone of its industrial sector, accounting for over 80% of total exports.

According to the IMF, Bangladesh’s economy was the second fastest growing major economy in 2016, with a rate of 7.1%.

In the decade since 2004 it averaged a GDP growth of 6.5 percent driven largely by ready made garments, remittances and agriculture.

A strategic partnership for apparel sector development between the two countries is also in the cards as both countries expressed interest at an international forum on the apparel industry last week.

“Bangladesh has a fairly large apparel industry where both countries could collaborate to share expertise for more growth. Sri Lanka’s export knowledge could be harnessed by Bangladesh,” the High Commissioner said.

The Bangladeshi delegation said there is great potential for trade between the two countries in sectors such as IT BPO industry, agriculture, apparel, pharmaceuticals, education, construction and logistics.

“What we want is the world to see Bangladesh in a different way and not through the conventional matrix.

The economic landscape of Bangladesh has changed. We have a large concentration of professional workers,” Hamidullah said.

National Chamber of Commerce of Sri Lanka President Sujeiva Samaraweera said that both countries should tap the each other’s potential and called upon Sri Lankan entrepreneurs to look at Bangladesh as a major market for value-added products.

“The Export Promotion Bureau of Bangladesh is efficient.

The country with friendly and cordial people who respect others is a good destination for investment,” Samaraweera said.