Bangladesh will soon formally propose signing a free-trade agreement (FTA) with South American trade bloc Mercosur, aiming to enhance bilateral trade, Commerce Minister Tofail Ahmed said on Sunday.
The agreement will benefit Bangladesh through access to an untapped market, Tofail told reporters after an exchange of views meeting with Brazilian Ambassador in Dhaka Joao Tabajara de Oliveira Junior at the former's Secretariat office.
"Bangladesh's Ambassador to Brazil sent a letter recently to the Ministry of Commerce on FTA with the Mercosur," said Tofail.
He said the ambassador mentioned in the letter that the Mercosur will be a new horizon for Bangladeshi exports.
"We will send a formal letter to the bloc through Bangladesh embassy in Brazil as early as possible showing our intent (to sign the agreement)," he said.
Mercosur, officially Southern Common Market, is a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994, with Brazil, Argentina, Paraguay and Uruguay its full members.
Tofail said currently, Brazil is a potential export market for Bangladeshi products especially readymade garment (RMG).
"But the tariff rate is still high for exporting Bangladeshi products to the South American country. Some 35 per cent tariff has to be given to export Bangladeshi goods," he stated.
"We can take trade facility through signing FTA with Brazil. Export volume of RMG to the South American country would be increased," said the minister.
"We can sign bilateral agreement with the Mercosur and if it reduces duty that will be a good market for the country's RMG. Besides, achievement of the seventh five-year plan and products diversification initiatives of the government would be easily done," he said.
However, there is no Bangladesh Brazil chamber of commerce and industry in the country. Currently, there are 29 foreign chambers with Bangladesh, he added.
The meeting was told that Bangladesh will be benefited, if the trade chamber is formed between Bangladesh and Brazil in the country.
Bangladesh has a good trade relation with Brazil for a long time and Brazil is interested to increase trade with Bangladesh, Joao Tabajara de Oliveira Junior said.
"We can set up a chamber between Bangladesh and Brazil to increase direct trade," said the envoy.
Senior officials of the Ministry of Commerce were present at the meeting.
During fiscal year 2017-2018 (FY '18), Bangladesh exported goods to Brazil worth US $176.89 million.
Its major export items to the South American country are knitwear, woven garment, vegetables and textile fibres.
On the other hand, import from Brazil stood at $1,520.61 million during the FY '18.
Major imports from Brazil are sugar and sugar confectionery, cotton, ships and animal or vegetable oils.
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