Uncertainty is looming large over Bangladesh's signing a free-trade agreement (FTA) with Sri Lanka due to political turmoil prevailing in the South Asian island nation, said a senior official of Ministry of Commerce (MoC).
A committee, led by an additional secretary of MoC, was formed to carry out the FTA negotiations with the country.
A joint study was also conducted for framing the terms of reference (ToR) of holding negotiations in this regard by October. But the move has been shelved because of political crisis in Sri Lanka, he also added.
When contacted, additional secretary of MoC Md. Shafiqul Islam said, "A joint feasibility study was supposed to be conducted to know the pros and cons of the proposed treaty. But Sri Lanka could not give necessary inputs due to its ongoing political problem."
"We have sent all drafts to Sri Lanka, but the country is making delay in this connection. We will submit the joint feasibility study report to both the governments after its completion. Final agreement will be signed, if both the governments give green signal," he added.
Meanwhile, discussions for signing the FTAs and preferential trade agreements (PTAs) are going on with several countries, said a relevant source.
But the process is going on at a snail's pace, he mentioned.
"The authority concerned could not make any significant move to sign FTA or PTA with any country soon, as there are many issues involved with the signing of such agreements," he added.
A high official of MoC said Bangladesh and Sri Lanka have already agreed to sign an FTA to enhance their bilateral trade.
Bangladesh Tariff Commission (BTC) has conducted a feasibility study, and Bangladesh Foreign Trade Institute (BFTI) will conduct another one in this regard.
Since Sri Lanka is a very small economy with a limited number of industries, the negative impact on Bangladesh industries following the FTA deal striking is likely to be low, he opined.
The BTC study views that Bangladeshi products like potato, vegetables, food items, petroleum products, plastic bags, rubber sheets, leather goods, iron and steel goods, electronic accumulators, and pharmaceuticals have substantial export potentials in the Lankan market.
Bangladesh and Sri Lanka are exchanging tariff preferences through SAFTA (South Asian Free Trade Area) and APTA (Asia-Pacific Trade Agreement). But the existing framework of these trade arrangements could not contribute much to enhance bilateral trade.
In fiscal year 2015-16, Bangladesh and Sri Lanka had a total trade worth US$ 76 million only. Of the volume, Bangladeshi exports fetched $30.45 million, against imports from Sri Lanka worth $45 million.
Bangladesh mainly exports woven garments, knitwear, home textiles, agro-products, frozen foods, leather and leather goods, footwear, raw jute, jute goods, and bicycle to Sri Lanka.
The major imports from that country include live animals, animal products, vegetable products, animal or vegetable fats and oils, prepared foodstuffs, mineral products, and plastics and rubber articles.
Sri Lanka has bilateral FTAs with countries like India and Pakistan.
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