Exploring trade potential in Latin America

Latin America comprises 20 sovereign states including several territories and dependencies. It has an area of roughly 19,197,000 square km which constitutes nearly 13 per cent of the earth's land surface area. The total population of Latin American countries is around 650 million. These countries are emerging to be geo-economically and strategically important today. Moreover, Bangladesh, having 160 million consumers, recently entered the group of lower middle-income countries. The country is also eager to diversify its overseas economic activities. In spite of having enormous trade and business potentials in most of the Latin American countries, Bangladesh has so far failed to explore the opportunities primarily due to lack of information and long distance. However, economic relations between Bangladesh and Latin American countries are growing over time. 

In the FY 2014-15, Bangladeshi exports to Latin American countries were valued at US$ 454.58 million and imports were worth US$ 1,513.54 million. The export was only 1.5 per cent of the total export and import of Bangladesh from Latin America is only 3.5 per cent of the total import. Export items from Bangladesh to Latin American countries include woven garments, knitwear, specialised textiles, pharmaceuticals, home textiles, footwear, raw jute and jute goods, electrical and electronic equipment, melamine, bicycle, shipbuilding, etc. The import items from Latin America to Bangladesh include coffee, cotton, sugar, aluminium and articles thereof, electronics devices, petroleum and petroleum products, soybeans, silver, gold, medical devices etc.  

At present, of total Latin American countries, only six including Brazil, Chile, Colombia, Mexico, Panama and Peru are covering 94 per cent of total exports of Bangladesh and five countries including Brazil, Argentina, Guatemala, Paraguay and Uruguay dominate 98 per cent of total imports of Bangladesh. The above statistics point to the fact that trade is still insignificant relative to the total trade of Bangladesh and there is a huge untapped potential to enhance trade cooperation with the Latin American countries. Bangladesh and Latin American countries can benefit from further trading of the above items at a competitive cost. 

Latin American countries may also invest here as the government of Bangladesh is setting up 100 special economic zones (SEZs) in different parts of the country and also offers a wide range of incentives for foreign investors in particular. Moreover, Bangladesh still enjoys the least developed country (LDC) facilities including zero tariff in the world market in general. Bangladesh can progress in trade and commerce by keeping close contacts with the newly established Latin American trade bloc, namely, 'Pacific Alliance' for further integration with the countries of the region. The export volume of Bangladesh will increase significantly and the country can involve itself in the global supply chain by exploring unlocking potential of trade and commerce between Bangladesh and Latin American countries.  

An important constraint to trade between Bangladesh and Latin American counterparts is the absence of most of the Latin American missions in Dhaka and vice-versa. To capitalise the vast potential for trade cooperation, we have to undertake a special joint study on how to strengthen the economic relationship between Bangladesh and Latin America, how to remove existing trade and investment barriers, and how to support greater cooperation.  

To accrue greater benefits of trade between Bangladesh and Latin America, we have to establish common accreditation board for acceptance of standards of Bangladeshi products by the Latin American countries. Furthermore, we need to set up institutional facilities including business and cultural centres and more foreign missions between countries. Participating in trade fairs and attending different discourses are also important for enhancing trade and commerce. In this connection, visa procedure needs to be simplified for business persons and multiple visas may be issued for them.

The writer Assistant Secretary (Planning and Research), the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) 

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