US president-elect Donald Trump's announcement to quit the Trans-Pacific Partnership (TPP) trade deal on his first day in the office might bring a short-term relief for Bangladesh, opined a senior economist.
But such an announcement signalled his determination to move ahead with protectionist policies which might negatively affect the multilateral trading regime, he added.
In that case, in the long-run, Bangladesh along with other Least Developed Countries (LDCs) would run the risks of getting marginalised in the international trade, he further added.
Talking with the FE on Tuesday, Dr Zahid Hussain, lead economist of the World Bank at its Dhaka Office, said that in the short-run Bangladesh was going to be immune to the risks from Vietnam's potential tariff-free market access to the United States.
Bangladesh is apprehending a very stiff competition from Vietnam, a member of the 12-nation trading bloc in the making, especially in export of ready-made garments (RMG) to the US.
Mr Md Shafiul Islam, first vice-president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), observed that scrapping the TPP deal would be good for Bangladesh.
"Under TPP, Vietnam would get better market access to the US along with Canada and Australia," he said. "So, Bangladeshi RMG will face a very uneven competition, especially in the US market. If there is no TPP, Vietnam will not get the advantage."
In 2015 Vietnam exported apparel worth about $10.56 billion to the US market while Bangladesh exported garments worth $5.40 billion.
"But, scrapping the TPP should be analysed from the greater perspective of the global trade regime," said Dr Zahid.
The World Bank economist was of the view that if protectionist measures were increased, multilateral trade would be in trouble and Bangladesh would not gain in the long-run.
Earlier, in a study on the TPP impact on the country, Bangladesh Tariff Commission (BTC) said the country's ready-made garment (RMG) export would face little competition from Vietnam after signing of the 12-nation trade agreement.
The BTC also argued that Bangladesh was neither in a position to join the TPP deal nor it needed to do so.
The study report was submitted to the commerce ministry early this year.
Under the deal, though Vietnam would get a better market access to the US and ultimately enjoy a tariff-free facility, it would take at least five years to complete elimination of tariffs. Moreover, Vietnamese apparel manufacturers would have to comply with some stringent rules of origin to take the advantage of duty-free access.
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