Go fast for targeted FTAs

Bangladesh should begin negotiating Free Trade Agreements (FTAs) with selected partners and blocs without delay to protect market preferences before its graduation from the least developed country club next year, according to economists and business leaders.

Besides, they called for stronger policies and greater private-sector involvement in managing intellectual property rights, which will be a major issue after graduation.

"FTAs are essential for Bangladesh to protect its market access. So, negotiations should prioritise sectors where there is a risk of losing access," said MA Razzaque, chairman of the Research and Policy Integration for Development (RAPID), at a roundtable in Dhaka yesterday.

The economist advocated against signing deals that bring little benefit.

"We should not sign FTAs with countries like Singapore or others where we do not actually need," said the RAPID chairman at the event titled "Intellectual Property and Trade Transition Challenges: Best Approaches for Local Industries of Bangladesh".

Apart from FTA talks, Razzaque called for stronger domestic readiness. "Our protected industries must be promoted internally, efficiency must be increased, and our policies must be forward-looking."

Fahmida Khatun, executive director of local think tank Centre for Policy Dialogue (CPD), said trade dynamics are shifting.

"Global trade is reversing fast, and domestic politics and geopolitics are now shaping policies more than economics. Free trade once drove welfare, human development, GDP growth, and jobs. But those gains are now being rolled back. The WTO is weakening, while plurilateral and bilateral agreements are taking over."

Fahmida cautioned against viewing FTAs as a cure-all. Simply signing an FTA does not guarantee success.

"In trade, countries do not get what they deserve; they get what they can negotiate. Our challenge is not only negotiation capacity but also what we are willing and able to offer."

She urged graduating least developed nations to build alliances and pressed for affordable support to help small ventures with trademarks, branding and awareness.

Mostafa Abid Khan, senior fellow at Policy Research Institute of Bangladesh, said the narrow export basket of the country is a stumbling block for signing FTAs.

He said ten products account for 60 percent of earnings, leaving Bangladesh with fewer gains from FTAs.

"Negotiations, which usually take years, should therefore focus on resolving the most pressing issues," Khan added.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, underlined the need to strike a balance.

He said, "For Bangladesh, it is important to sustain the economic base as well as prosperity to take advantage of the global value chain at a time when the domestic economy is growing."

According to the economist, Bangladesh needs to strengthen institutions and private-sector capacity to translate its graduation into economic benefits.

He believes the country has no option but to pursue deeper global integration and attract investment, including foreign direct investment.

The dialogue was organised by the Bangladesh Chamber of Industries (BCI).

Its President Anwar-ul Alam Parvez said many manufacturers in the private sector would prefer graduation to be delayed. "But graduation cannot be avoided."

"After graduation, government revenue will drop because tariffs must be reduced," said the BCI president. On the other hand, he said, FTA signing will result in reduced import duties.

"Not only will the government lose revenue, but the packaging, cement, and polybag industries could collapse. If revenues decline, development spending will slow."

Parvez said bank interest rates are currently high, and foreign borrowing costs have also risen.

"We do not even know if we will have access to external funding in the future. If policies are not designed accordingly, the future will indeed be difficult," he commented.

At the event, Sanya Reid Smith, senior researcher and legal advisor at Third World Network, presented findings on intellectual property and trade transition, outlining ways for Bangladeshi industries to cope with the shift.

Among others, Abdul Hai Sarker, chairman of the Bangladesh Association of Banks; Md Anwar Hossain, vice chairman of the Export Promotion Bureau; and Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, Dhaka; also spoke.