Making use of trade deals

FE Team | Published: March 04, 2019 19:17:52

The contradiction is obvious and the irony reads like a comedy of errors! On one hand, government functionaries had signed up to bilateral or multilateral trade deals aplenty, even went to town with their prospective benefits. But only briefly, with very little by way of follow-up, publicising the contents, laying down the procedures for the businesses to avail themselves of the opportunities being presented. On the other hand -- down the line -- the ministries of commerce, industry and finance are left to lament awareness deficit among the business-industry community about the deals, more precisely, on how to reap the benefits on offer.
Of course, it is heartening to have struck a raft of bilateral deals and umbrella of free trade agreements helped no less by mutually advantageous locations along with a measure of importance that Bangladesh economy has acquired in the recent years. But these carry obligations for the signatories, mainly to their constituencies: Business and industry community and the consumers at large. For Bangladesh's part, the question is: Is it doing its part of the bargain? Or, indeed where does it stand in comparison with other partners in the trading arrangements? Though it is now a somewhat obsolete cliché vis-à-vis the importance of foreign direct investment (FDI), 'trade is five times better than foreign aid in terms of yielding dividends to a growing economy', still it makes sense. Overall, when some traditional high-profile trade blocs are beating a retreat in the face of trade and tariff wars between gigantic economies, relocation windows are being flung open by China, the intra- and inter-regional trading arrangements of which Bangladesh is part seem to be on a solid footing. The latter refer to South Asia Free Trade Area (SAFTA) Agreement, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) FTA, Asia-Pacific Trade Agreement (APTA),Trade Preferential Scheme (TPS) among member-states of the OIC and Developing-8 Preferential Trading Agreement. Under some of these arrangements, Bangladesh enjoys tariff preference of 30-40 per cent local value addition. It is important to note that as against the duty-free access Bangladesh has to 38 countries, including 28 EU nations, it doesn't have to give duty waivers in case of importing goods from them. So it is doubly beneficial, first by way of gaining duty-free access for our exports; and secondly, in the shape of concessional tariff for imports. And there is a pressure too that will have to internalised in Bangladesh; the country has to make hay while the sun shines because on its elevation to middle-income country status it will have to forgo on concessional or preferential terms. May be trade pacts will prove to be a different kettle of fish.
But the question is how many of business community in the country are acquainted with the salient features of the deals, let alone have any knowledge about the procedures to be followed in reaping the benefits out of them. The commerce ministry is, it would seem belatedly, contemplating disseminating all relevant information on trade deals, bilateral and multilateral by releasing booklets to potential users. These ought to be a handbook of guidelines to the business community including the procedures to be followed in obtaining benefits from the deals.
But there is an imperative need for inventorying the country's capacity to reap dividends from the clusters of trading arrangements. Only then the government and the private sector will be able to embark on capacity building aimed at meeting the prerequisites viz. export diversification, import planning, productivity enhancement and supply chains tailor-made to external trade. Indeed such a process can't be short-circuited.