Despite agreeing to lower tariffs back in the 1980s, regional trade in South Asia is still not flourishing for higher duty, said Commerce Secretary Shubhashish Bose yesterday.
The average tariff rate of the South Asian nations is 13.6 percent, which is more than double the global average of 6.3 percent.
As a result the intra-regional trade volume among the South Asian nations is still 5 percent of their total annual foreign trade in a year, which is one of the lowest in the world.
It is not clearly stated in the South Asian Free Trade Area guideline how to phase out the sensitive lists of goods to eliminate the tariffs holding back trade among the South Asian nations, he said.
“We need to work to remove tariff and non-tariff barriers,” Bose said, while he was moderating a session on barriers to intraregional trade in South Asia at the 2nd South Asia Maritime and Logistics Forum at Le Meridien Hotel in Dhaka.
The estimated trade potential among South Asian nations is $67 billion. In reality, it is $23 billion.
Bose went on to hint of a possible comprehensive economic partnership agreement with India that will guarantee not only commodity trade but services and investment.
The political leaders of the region should work together to eliminate the mistrust that is acting as a major barrier to trade among the nations, the participants at the session said.
“We are living in the world of trade war,” said Md Nojibur Rahman, principal secretary to the prime minister.
For South Asia this is the best of time to work on intraregional trade. “We would be pursuing a win-win situation,” he added.
In another session G Chandrashekhar, an Indian cotton trade expert, said there is a possibility of the price of cotton to increase in the world market because of trade war between the US and China.
Chinese spinners have started buying cotton from India after the US slapped 25 percent retaliatory duty.
As a result, the demand for Indian cotton will go up. But at the same time there is a possibility of lower cotton production this year. Earlier, it was forecasted that the cotton yield in India, the world's largest cotton producer, in 2018-19 would be 35.5 million bales. But, the Cotton Association of India has now lowered the production estimate to 34.8 million bales. The Indian government has an even lower estimate: 32.5 million bales.
India produces cotton on 12 million acres of land and it is expected that the cotton acreage will increase to 13 million acres within next five years, Chandrashekhar said.
The cotton traders of both the countries urged the governments to introduce direct shipping line between Pangaon port in Bangladesh and Vishakhapatnam port in India for reducing freight time and charge.
The two-day-long forum came to an end yesterday. Prime Minister Sheikh Hasina inaugurated the forum in Dhaka, where ministers, government bureaucrats, traders, businessmen and other stakeholders participated.