Bangladesh is likely to ink a deal with Eurasian Economic Union (EEU) for paving the way for duty-free access to the Russian market and exploring untapped export potential in East European markets, officials said.
The ministry of commerce (MoC) recently finalised draft of a memorandum of understanding (MoU) in this regard which earlier the EEU had forwarded to Bangladesh embassy in Moscow, they added.
The EEU groups five northern Eurasian countries-Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. These nations have common customs border and a single market of 183 million people and a gross domestic product of over US$4.0 trillion.
A senior trade official told the FE that after finalising the MoU recently it was sent again to the EEU through foreign ministry for their final look.
"If they agree with the changed texts, the MoU will be signed soon," he said.
The official said despite having immense potential of Bangladeshi goods in East European countries, the market access is still very limited. Presently, Bangladeshi goods have to take a detour to enter the countries mainly through Germany and Turkey.
Signing the MoU will open the doors for direct entry of goods, leading to increase in export to those countries, he said.
"We are also interested to sign the deal to create environment for seeking duty-free market access to Russia for which we are trying for over ten years," he said.
Trade officials said Russia, being a member of EEU, is now not eligible for negotiating with Bangladesh bilaterally on duty-free market access since the country shares common border with other member-nations in the grouping.
Bangladesh will have to negotiate with the EEU to get free market access of products to any of the EEU-member countries. Signing the MoU with the EEU may create scope for getting duty-free access to the bloc, the officials think.
A senior MoC official told the FE that Bangladeshi goods have immense potential on the Russian market. Export of Bangladeshi products to Russia has increased fivefold during the last five years, amounting to US$314.292 million in the fiscal year 2015-16.
He said Bangladesh mainly exports apparels, jute, frozen foods, tea, leather, home textiles and ceramic products. Its imports include cereals, minerals, chemical products, plastic products, metal, machinery and mechanical equipment.
Statistics show that Bangladesh's export of goods to the EEU member-states is on the rise with $321.91 million turnover in the last fiscal from $302 million in 2014-15.
Bangladesh enjoys duty-and quota-free market access to the European Union having 28 members. The country is also exploring possibility of joining another bloc, namely Trans-Pacific Partnership (TPP), a trade agreement among twelve Pacific Rim countries, which will lower trade barriers, such as tariffs, among the signatories. However, the launching of TPP has become uncertain following the election of Donald Trump as US president. Trump is opposed to joining the TPP by the USA.
Contacted earlier, adviser of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Manzur Ahmed hailed the government move to sign deal with the EEU and said the tie-up should have been done much earlier.
"The Eurasian and CIS (commonwealth of independent states) countries have a big market which we should have explored long before. The government is yet to take any fruitful step to be linked with the countries," he said.
Mr Ahmed said instead of depending exclusively on markets in the European Union and the United States, Bangladesh needs to find out alterative marketplaces for raising exports.
The CIS countries-former republics under the defunct Soviet Union-should be given topmost importance, he noted.
syful-islam@outlook.com
