Retaining duty benefits until new trade deals focused

Dhaka is seeking continuity of the existing duty benefits on exports until new trade pacts are signed with China, India and Japan ahead of Bangladesh's LDC graduation.
Efforts have already got underway to strike free-trade agreements (FTAs) with these important trade partners, officials said.
Keeping in mind the impacts of losing tariff facilities in many wealthier countries when Bangladesh will leave the world's poor-country club in 2026, government authorities are about to open FTA talks with some countries having significant bilateral trade, including China, Japan, and India.
Officials concerned with the ministry of commerce (MoC) told the FE that FTA negotiations are huge a task and may not be completed before Bangladesh graduates from the group of least-developed countries or LDCs.

They said as the procedure leading to signing FTA with China, India, and Japan started and would take time, Bangladesh would request them to continue with the existing duty benefits until FTA deals made.
A senior MoC official said Bangladesh was about to start negotiations with India for signing a Comprehensive Economic Partnership Agreement (CEPA). After completion of a joint study on the pros and cons of CEPA, the prime ministers of Bangladesh and India last September had asked the trade officials of both countries to go for negotiations within 2022.
However, the formal negotiations have yet to commence as India is further scrutinising the joint-study report.
"Prime Minister Sheikh Hasina is scheduled to visit India next month when she will have bilateral talks with her Indian counterpart, Narendra Modi. The MoC has kept the issue of continuation of duty benefit before signing CEPA on the agenda," the trade official said.
Bangladesh has around US$2.0 billion worth of exports to India which enjoy duty-and quota-free market access there under the South Asian Free Trade Area (SAFTA) deal. Unless the benefit is extended, Bangladeshi goods will be subject to higher duties after graduation from LDC group.
Also with Japan a joint feasibility study on economic partnership agreement (EPA) is in progress, and the two sides met in Dhaka last month for a second meeting of the study group.
The study is about to complete shortly and Bangladesh expects the deal-making by 2025.
MoC officials say if the negotiations are not complete by then, Bangladesh will also seek continuity of the existing duty benefits on the Japanese market.
Under the duty-and quota-free scheme Japan provides duty-free access for 97.9 per cent of Bangladeshi products. In the fiscal year 2022-23 Bangladesh exported goods worth $1.90 billion to Japan-some 40.45percent increase over the previous year.
With China also is a joint feasibility study on signing FTA now underway. Bangladesh Trade and Tariff Commission (BTTC) has completed the Bangladesh portion of joint-study report and is now waiting for Chinese response to hold the second meeting of the working group in Dhaka to discuss the study report further.
"Once the two sides complete the study, we'll start negotiations on signing an FTA deal, but that also takes time," says one of the officials to suggest merits of the interim arrangement for free trade.
Bangladesh's export of goods to China in the fiscal year 2022-23 amounted to $677 million. Some 98 per cent of Bangladeshi products enjoy duty-free access to China's vast market which may face a blowback following LDC graduation in 2026.
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