Dhaka's no to KL's FTA offer

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Nazmul Ahsan
Bangladesh does not have any plan to sign a free trade agreement with Malaysia despite Kuala Lumpur's offer to extend duty free access to Dhaka's major export items, officials said Saturday.
The South-East Asian economic giant last month made the preferential trade offer, saying the country is ready to give duty-free access to top Bangladeshi products under an 'early harvest programme' provided Dhaka agrees to sign an FTA with Kuala Lumpur.
Commerce ministry officials poured cold water on the proposal early this week ahead of Prime Minister Sheikh Hasina's high-profile visit to Malaysia. Hasina will meet her Malaysian counterpart on May 19.
"The FTA issue could feature in the bilateral discussion during the PM's visit," said an official.
"But I don't think we'll sign an FTA with Malaysia in the coming years. We are not prepared for such a deal and it could be asymmetric. It can harm - rather than benefit - our exports," he added, speaking on condition of anonymity.
Officials fear that Bangladesh lacks the negotiation skills and its export basket is still confined to a limited number of items to gain maximum advantages from a bilateral FTA with a country like Malaysia.
"By contrast, Malaysian export products are so sophisticated that we could never compete with them. We need a thorough study on Malaysian economy and its strengths before signing such a deal. So, at the moment we don't see any prospect of accepting the Malaysian offer," he said.
Presently, Bangladesh does not have any bilateral FTA with any nation across the globe although in the past few years a lot of countries including India, Pakistan and Sri Lanka have made formal proposals.
Being a least developed country, Dhaka enjoys duty-free access to most of the European, North American and Pacific and Indian Ocean nations. Early this year, China also offered duty free access to 4,721 Bangladeshi goods.
Officials said Bangladesh prefers signing multilateral trade deals with a group of countries rather than a bilateral FTA. Dhaka is a member of SAFTA, Asia-Pacifica Trade Agreement (APTA), BIMSTEC and D-8.
Although it gets duty-free access of thousands of goods to South Asian nations under the SAFTA signed in 2006, most of its major export items such as garments don't enjoy the facility. Other trade deals have yet to make major impact in the country's trade.
In its proposal Malaysia, which also hosts nearly one million Bangladeshi workers, said it would give duty-free access to most of the 19 goods Dhaka had sought from Kuala Lumpur for the last few years.
Major items in the Dhaka's request list include woven and knit garments, halal meat, ceramic, jute goods, pharmaceuticals, leather goods and fresh vegetables.
Last month, Secretary General of Malaysian international trade ministry, wrote a letter to Bangladeshi High Commission in Kuala Lumpur, saying the FTA will be "the best option to address" Dhaka's request.
The official said the FTA would be beneficial for both the countries and hoped that Bangladesh government would view their "proposal favourably and agree to commence negotiations as soon as possible."
Bangladesh exported goods worth $31.28 million to Malaysia in 2008-2009 and imported $ 694 million from the South East Asian nation.
Malaysia has bilateral FTAs with Pakistan and Sri Lanka among the South Asian countries.