The government is planning to sign a preferential trade agreement with Sri Lanka in a limited scale instead of the much-talked free trade agreement between the two countries to strengthen bilateral trade, officials of the commerce ministry said.
The ministry has primarily decided to include only 10 to 12 products including frozen fish and jute goods having export potentials to Sri Lanka in the proposed PTA as inclusion of many products will not be beneficial for the country, they said.
‘The issue will be discussed at the first meeting of Bangladesh-Sri Lank Joint Working Group on Trade to be held at the first week of September in Dhaka,’ a senior commerce ministry official told New Age on Thursday.
He said that both the sides would examine the possibility of signing of the PTA and would also examine the products for inclusion in the deal.
The government has decided not to sign the proposed FTA with the island country as commerce ministry found ‘no gain’ from signing the FTA, he said.
In last week, the commerce ministry asked the Bangladesh Tariff Commission to select the products to be included in the agreement after analyzing tariff and non-tariff issues.
The ministry also requested the Federation of Bangladesh Chambers of Commerce and Industry to prepare a list of products based on the export potential and tariff advantages.
Commerce ministry officials said that Sri Lanka has been pushing the idea of signing FTA with Bangladesh as soon as possible to boost bilateral trade and investment between the two countries.
On request of the ministry, Bangladesh Tariff Commission conducted a study on the proposed FTA and found that the proposed agreement with Sri Lanka would bring ‘no gain no loss’ result for the country because of low trade volume between the two countries and also similar export composition of the two countries.
According to the study, bilateral trade between the two countries is insignificant and prospect of increasing trade volume in the short term is also uncertain.
‘Export items of both the countries are almost similar. And because of such similar export composition, the proposed FTA may not create any opportunity for Bangladesh,’ the study said.
Sri Lankan major export items are apparel and plastic products which are also chief export items of Bangladesh.
Commerce ministry officials said that they were examining some products like frozen fish, potatoes and other vegetables, juice and food products, agricultural apparatus, jute carpets, sacks and bags, leather and leather products, cosmetics, malt extract, tobacco, Portland cement and other construction materials, plastic products, paper and paper board, footwear, melamine, tableware and kitchenware, lead-acid electric accumulator for getting preferential market access to Sri Lanka.
The list, however, will be finalised after getting study-report from the BTC, Bangladesh Business Promotion Council and opinion from the FBCCI, the apex trade body of the country, they said, adding that the organisations will finalise it after consulting with the exporters and other stakeholders.
Bangladesh exports items to Sri Lanka include woven garments, pharmaceuticals, jute and jute yarn, knitwear, textile fabrics, sacks and bags, plastic goods, cotton yarn, iron chain, leather, accumulator battery and parts, engineering products and furnace oil.
On the other hand, the country imports chemical products, rubber and rubber products, transport equipment, raw materials for RMG and electric and machinery equipment.
According to the official data, bilateral trade between the two countries is not significant compared with other neighboring countries as it remains far below $100 million per year.
In 2011-12 fiscal year, Bangladesh exported goods to Sri Lanka worth $42.86 million while imported goods worth $32.2 million.
Bangladesh’s exports to the country declined drastically in the last fiscal year 2012-13 and stood at $23.69 million because of drop in export of readymade garment items, yarn, jute and jute yarn and some other items, commerce ministry data showed.
-With New Age input
