Bangladesh expects to sign a free trade agreement with Sri Lanka during the tenure of the incumbent government as both countries have already completed looking into the feasibility, Commerce Minister Tofail Ahmed said yesterday.
He disclosed this without elaborating in response to a query from reporters after a meeting with Malik Samarawickrama, Sri Lankan minister for development strategies and international development, at his secretariat office in Dhaka.
“We agreed to finalise the joint feasibility study that was conducted by both countries with a view to signing the FTA between the two countries,” Ahmed said.
“After finalising the joint study, we will sign the FTA within the tenure of the current government,” he said.
The national election in Bangladesh may take place in late December or early January.
The nature of the agreement will be a little bit different as it will cover not only the duties but also the services sector and investment, Ahmed said.
He invited Sri Lankans to invest in the special economic zones Bangladesh is developing across the country.
“Joint feasibility study has been done by our two governments and I am told that it would be completed by the end of this October,” said Samarawickrama.
He was talking to reporters after a meeting with the leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at its office in Dhaka.
Siddiqur Rahman, the BGMEA president, said a joint working committee would be formed engaging garment exporters of both countries to produce value-added apparel items for exports to European markets.
He said the formation of the committee was still at the very initial stage. When it comes to producing some garment items, Bangladesh is still very weak but Sri Lanka is strong, he said.
In those cases, Bangladesh's manufacturers will produce the basic garments and send them to Sri Lankan garment factories for more value addition under the “Made in Bangladesh” tag, said Rahman.
Moreover, Sri Lanka is in an advantageous position because of its sea ports, which are closer to European markets than Bangladesh's Chittagong port, he said, adding that Bangladesh would also use the Sri Lankan ports to its benefit.
The BGMEA leader said Sri Lanka is at least two weeks ahead in lead time compared to Bangladesh thanks to its geographical location.
A shorter lead time is very important in fast fashion as buyers always want quick shipment of goods, he added.
Rahman said a delegation from the BGMEA would hold a meeting with Sri Lankan government officials and garment traders in the island nation next month.
Ahmed also said four direct flights between Dhaka and Colombo could be introduced by coming April to improve communication between the two countries.
Regent Airways, a local airline, has already been allowed to operate direct flights between Dhaka and Colombo, according to a statement from the commerce ministry.
Last fiscal year, Bangladesh exported goods worth $30.02 million to Sri Lanka while importing goods worth $47.80 million, commerce ministry data showed.