Bilateral Free Trade Agreement
New policy guidelines on cards to open new market
The government has taken an initiative to frame new policy guidelines for signing preferential trade and free trade agreements in the light of the changed global and domestic trade patterns linked to the country's manufacturing potentials for export.
The commerce ministry has already asked the Bangladesh Trade and Tariff Commission to prepare a draft of the 'Policy Guidelines on Preferential Trade Agreement (PTA) - Free Trade Agreement (FTA)-2020' by updating the policy guidelines on FTA-2010, said trade officials.
The existing guidelines need to be updated to make it compatible with new realities they said adding a template for the upcoming PTAs and FTAs was needed to be followed in signing such deals.
Bangladesh has been negotiating to sign PTAs or FTAs with a number of countries, including Nepal, Bhutan, Indonesia and Sri Lanka, to extend its preferential or duty-free market access. Trade negotiators are close to signing PTAs with Bhutan and Nepal.
The cabinet on September 14 approved a draft PTA with Bhutan, the first country with whom such a bilateral preferential trade agreement to be signed.
The government is also examining the possibility of entering into either an FTA or PTA with a number of countries, including Vietnam, Thailand, Morocco, Malaysia, the United States, Japan, Canada, Senegal, Nigeria, Kenya, South Korea, India, Saudi Arabia, South Africa and such others.
Commerce ministry official said Bangladesh is now a member of two regional trade blocs - the South Asia Free Trade Agreement and the Asia Pacific Trade Agreement. The country, however, is not part of any bilateral PTAs or FTAs.
He said trade officials are emphasizing for signing FTAs or PTAs with major trade partners for continuation of duty-free market access and preferential trade benefits even after the country has graduated from the least developing country status.
Bangladesh is supposed to leave LDC status in 2024 and may lose duty-free export facility three years after the graduation, they said. Only FTAs and PTAs with potential trade partners may benefit the country in new situation.
Although the country managed to increase its market access and boost export in developed countries, including the US, the United Kingdom and other European and Asian countries, market access has not sufficiently increased in developing countries.
Entering into FTAs and PTAs with potential trade partners will enhance this scope and bring boost to the country's export. It will also play a vital role in attracting foreign direct investment, developing the service sector and increasing manpower export.
The objectives of the guidelines would be to provide a framework for identifying potential countries for signing FTAs and PTAs with, coverage of both goods and services under the agreements and procedures to be followed for negotiations on the deals.
As per the 2010 guidelines, the coverage of FTAs mainly focused on goods and services. But the global situation has significantly changed and new areas intellectual property rights, technology and environment should be incorporated in new drive.