At present, intra-regional trade accounts for only five per cent of South Asia's total trade with the rest of the world. The situation has not changed over the past 25-plus years. When it comes to Bangladesh's exports to its three regional neighbours --- India, Nepal and Bhutan --- it was a mere 4.1 per cent of the country's total receipt from exports at USD52.1 billion in FY2021-22, Export Promotion Bureau (EPB) data show. But had Bangladesh's trade connectivity with its, mainly, eastern South Asian neighbours been duly developed by removing the major barriers to smooth trade, the volume of the country's regional trade could be twice as much. So, the question that would naturally arise is, what is getting in the way of exploiting this enormous regional trade potential?
Admittedly, the major obstacles to unhindered regional trade in South Asia lie in poor transport and trade infrastructure, age-old and lengthy manually-performed paperwork to process business activities and restrictive trade and transport regulations. According to a World Bank (WB) estimate, South Asian regional trade amounted to USD 25 billion in 2019. But had there been no roadblocks on the way, the volume of this trade could be as high as USD73 billion. Clearly, the immense potential of South Asia's intra-regional trade has basically remained untapped. Consider that 80 per cent of Bangladesh's land-based trade with its South Asian partners, mostly with India, is handled through its three major land ports, namely, Benapole, Bhomra and Burimari. But by simplifying the existing regulatory regimes, say, through digitising trade processing, and doing the work of checking the cargo-carrying transports electronically, the volume of trade would increase manifold. The good news is, thanks to the assistance provided by the WB, the government has taken the initiative to facilitate cross-border trade by way of improving the transport and customs regimes across Bangladesh's 23 land ports along its international border. From an exclusive report carried by the April 21 issue of this paper, it could be further learnt that the Roads and Highways Department (RHD) has already set about conducting a feasibility study to this end under a technical assistance project worth Tk1.27 billion due for implementation between January 2023 and December 2026.
Under this project, the work to upgrade the state of cross-border trade and regional connectivity will be done through activating the Motor Vehicle Agreement (MVA) that Bangladesh, Bhutan, India and Nepal (BBIN) signed in 2015 to regulate passenger, personal and cargo vehicular traffic among the four South Asian neighbours. At the same time, the international customs transit system called International Road Transport (TIR) that some 66 countries of the world already use will be adopted under this technical assistance project. Note that the TIR procedure enables goods to move under customs control across international borders without payment of the duties and taxes that are normally due at the entry and exit points. Once the system is in force, a goods-laden truck from Bangladesh, bound for, say, Bhutan, will not be required to go through customs checking at different entry and exit points on the way.
Under the circumstances, the government should fast-track the project work so undertaken to boost its regional trade with India, Nepal and Bhutan. The dividends that Bangladesh is expected to draw from the enhanced trade with its regional partners will, hopefully, go to offset the initial losses the country may incur during its post-LDC graduation phase. Notably, those include, for instance, a drop in exports to European markets due to the discontinuation of some preferential trade facilities.
