BD-Turkey FTA talks this month

Syful Islam | Published: August 09, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Bangladesh is going to start negotiations with Turkey this month for signing a bilateral free-trade agreement (FTA) as the imposition of 17 per cent additional duty by Ankara on apparel items is seriously affecting export from Dhaka, competent sources have said.
Apparel products account for over 75 per cent of Bangladesh's total exports to Turkey. The signing of the proposed pact may lead to abolition of the duty on Bangladesh's exports, they have said.
To start the talks with Turkish trade officials a high-powered delegation led by additional secretary of the ministry of commerce (MoC) Manoj Kumar Roy will visit Ankara on August 25-26.
Bangladesh has prepared a template on the proposed FTA and sent it to Turkey for their preparation to start talks. Â
"The preliminary talks will be held during the visit. Mainly the template will be the focus of talks where two sides will discuss their expectations from the accord," Mr Roy told the FE. Prime Minister Sheikh Hasina visited Ankara in April 2012 when the two sides agreed to sign a free-trade deal to boost bilateral trade. In the fiscal year 2013-14, Bangladesh exported goods worth around US$856 million to Turkey while its imports from there cost around $200 million.
Bangladesh showed interest in FTA with the Eurasian nation after Turkey in July 2012 levied 17 per cent additional duty on apparels from the least-developed countries (LDCs). Exports from LDCs, including Bangladesh, were enjoying zero-duty facilities on that market.
Alongside the LDC-made apparels, Turkey also imposed 36 per cent duty on garments produced by developing countries and 42 per cent on apparels manufactured by developed countries.
As an impact of paying the additional duty, Bangladesh's apparel export to Turkey came down to $355.93 million in FY 2011-12 from $518.32 million in FY 2010-11. That marked a steep fall from 69.24 per cent growth posted in the FT 2010-11 over the apparel product shipments worth $306.27 million in the FY 2009-10.
Following the export fall the MoC carried out a study on the prospects for an FTA with Turkey with the help of Bangladesh Tariff Commission (BTC). The BTC gave a positive note on the bid for signing the trade accord.
Bangladesh's major exports to Turkey include apparels and clothing accessories, textile yarn and related products, non-metallic mineral products, tobacco and tobacco manufactures, and leather and leather goods.
Bangladesh imports from Turkey edible vegetable and certain roots, salt, sulphur, earths and stone, plastering materials, lime, cement, products of chemical and allied industries, plastic and articles thereof, cotton, cotton yarn and cotton fabrics, iron and steel.
A senior trade official said till now Bangladesh is in an advantageous position against Turkey in the two-way trade with higher export. So, Bangladesh will have to incur lower losses than Turkey if a bilateral FTA is signed.
He said since Bangladesh's main export item-apparel-faces an obstacle because of the additional duty from Turkey, the signing of an FTA will be logical to remove the duty on apparel export.
Sources said the template, prepared by the BTC, kept provisions for movement of natural persons, mutual recognition arrangement, and flexibility for the least-developed party.
It also incorporated the provision of 'movement of natural persons' under the Mode-Four (IV) of the World Trade Organisation (WTO). It also seeks special and differential treatment for the products of Bangladesh to the Turkish market under the proposed deal.
The template also proposed inclusion of issues like socioeconomic development, strengthening economic competitiveness, upgrading human resource development and promotion of sustainable economic development within the broad areas of economic cooperation.
Furthermore, Dhaka has attached importance to progressively liberalizing the investment regime, taking necessary measures for protection of investment, granting most-favoured nation treatment, following a positive-list approach and adopting measures against any fraudulent activity under the proposed bilateral free-trade agreement.