All are set for signing a memorandum of understanding (MoU) on trade cooperation between Bangladesh and Japan which may culminate into a bilateral free-trade agreement (FTA) later on, officials say.
The MoU signing will take place during Prime Minister Sheikh Hasina's Japan visit on November 29-30, they add.
Dhaka had long pursued a joint feasibility study to be made aiming to strike an FTA or a preferential trade agreement (PTA) to boost Bangladesh's export to the developed country of Asia.
However, Japan had been reluctant to advance the proposal since any such demand was not raised by its local business community.
"We will sign an MoU on trade cooperation with Japan this time," commerce secretary Tapan Kanti Ghosh told the FE Friday.
He hopes signing trade partnership will be the beginning of discussion which in the future may lead to further larger collaboration.
Mr Ghosh says under the MoU several working groups will be formed for discussing trade cooperation. "In the matured stage it may turn a trade deal."
As a least-developed country (LDC) Bangladeshi products enjoy duty-and quota-free market access of almost all goods. In fiscal year 2021-22 Bangladesh's export to Japan amounted to $1.35 billion in a modest rise from $1.18 billion in the previous year.
On the other hand, in FY 2020-2021 Bangladesh's imports from Japan cost the country $2.02 billion.
The Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) recently conducted a survey on 300 companies, local firms and Japanese companies operating in Bangladesh, and found majority of them expecting that the two nations should sign a free-trade deal.
Japan's ambassador to Bangladesh, Ito Naoki, at a recent event in Dhaka hoped that bilateral trade between the two countries might reach $20 billion by 2030 from the present volume of over $3 billion since garment export to the East Asian country is growing fast.
He said most of the companies conducting trade between the two countries wanted that the two nations sign an FTA to retain duty privileges after Bangladesh will have graduated from the world's poor-country club in 2026.
However, Mr Naoki said Bangladesh would need to improve business environment to sign any an FTA, PTA, or any economic-partnership agreement with Japan.
Country representative of Japan External Trade Organisation (JETRO) Yuji Ando earlier had told the FE some Japanese companies felt the need for an FTA or extension of existing generalised system of preferences (GSP) facility.
"If the tariff-free access to Japan is not available, relocation (of factories) from Bangladesh might take place to other countries having trade agreements (with Tokyo) like that of Vietnam, ASEAN, and India," he said replying to an e-mail communication.
The JETRO chief also said as Japanese companies in Bangladesh export goods and products mainly to Japan, there is a need to see the balance of trading items between the two countries carefully which would help understand whether the FTA or GSP extension would be better to go to the next level.
The Bangladesh Trade and Tariff Commission (BTTC) had earlier studied the pros and cons of signing such a deal with Japan which found that an FTA with Japan would be immensely beneficial to Bangladesh in the post-LDC era.
© 2024 - All Rights with The Financial Express
