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The bilateral trade between Bangladesh and Bhutan is not significant but the treaty will help to increase regional trade and connectivity
With a view to increase regional trade, Bangladesh is going to sign its maiden preferential trade agreement (PTF) with Bhutan likely in the first week of September.
A high official at the Commerce Ministry confirmed the signing to Dhaka Tribune.
In line with the preferential agreement, a total of 100 Bangladeshi products will enjoy duty-free access to the Bhutanese market, while as many as 34 Bhutanese items will also enjoy duty free access to Bangladesh.
“We have completed the vetting from the Law Ministry and the signing date for the FTA is set for any day on the first week of September,” Sharifa Khan, additional secretary at the Ministry of Commerce told Dhaka Tribune.
“We focused on products such as garment, leathers and leather goods, food and electric items, as these have huge potential,” she added.
The bilateral trade between Bangladesh and Bhutan is not significant but the treaty will help to increase regional trade and connectivity, Sharifa observed.
According to Ministry of Commerce data, the volume of bilateral trade between the two countries amounted to about Tk 484 crore as of fiscal year 2018-19.
“It is important because it’s the first ever of its kind, rather than for trade value. It is a start and we will continue our efforts to sign trade deals with regional and global partners to increase exports volume,” she further said.
Meanwhile, economists also opined that in terms of regional connectivity and trade it would be good for Bangladesh.
“PTA with Bhutan should be considered from a regional trade perspective. It would not have a big impact on the country’s exports as it is a small country with a meager population,” Dr Zahid Hussain, former lead economist at the World Bank, Bangladesh told Dhaka Tribune.
“We can get benefits in case of importing hydroelectricity and in tourism. But from the regional trade perspective, it carries a symbolic value,” said Zahid.
However, it is a free trade agreement and it could be more beneficial for Bangladesh as it covers more trade, he added.
PTA plays an important role in the expansion of exports and trade.
By 2024, Bangladesh would be graduating to a developing country and it will lose duty free market access that it is enjoying as a Least Developed Country (LDC), said Centre for Policy Dialogue (CPD) research director Khondaker Golam Moazzem.
To continue trade facilities after the graduation, Bangladesh should take preparation for free trade agreements with regional trade partners as well as other countries, said Moazzem.
Although bilateral trade between Bangladesh and Bhutan is not significant, it is a start and the experience will help in signing deals with other countries, he added.
Bangladesh exports mostly apparels, food items, plastics, pharmaceuticals, furniture and electrical products to Bhutan.
In the last fiscal year 2018-29, Bangladesh exports to Bhutan was Tk64.12 crore ($7.56 million), while in the FY20 exports declined to Tk36.6 crore ($4.35 million).
On the other hand, Bhutan exports chemicals, pulps, bolder stones, fruits and vegetables to Bangladesh. In the fiscal year 2018-19, Bangladesh imported goods worth Tk419.54 crore from Bhutan.
Necessary discussions for signing the PTA have already been completed during a video conference between high officials of Bangladesh and Bhutan in June of this year.
A ten-member delegation of the commerce ministry of Bangladesh headed by Additional Secretary Sharifa Khan and a 14-member delegation of Bhutan headed by Director General of the Department of Trade, Bhutan Sonam Tenzin joined the conference.
(DT)
