Sign FTAs with Asean, boost export, investment

Economists and business leaders have suggested that Bangladesh sign free trade agreements with Asean member states for boosting exports to the bloc, and ease investment regulations to draw foreign investments.

They also recommended rigorous efforts to diversify its products and their marketing overseas as the country will face stiff competition after making its status graduation into a developing country by 2027 when the European market will withdraw its tariff concession.

The observations came at a webinar on "Expanding Bangladesh's Business Ties with the ASEAN Countries" organised by the Ministry of Foreign Affairs on Sunday. Economists, Bangladesh's ambassadors to the ASEAN countries and business leaders attended it.

In a presentation, Selim Raihan, a professor in economics, said in 2019, Bangladesh had export earnings as meagre as $846 million from Asean states against an import bill of roughly $9 billion.

He said Bangladesh could gain significantly by integrating into Asean markets. "It is high time to look into Southeast Asia."

Prof Raihan said the signing of the Regional Comprehensive Economic Partnership (RCEP) made up of 10 Southeast Asian countries, as well as South Korea, China, Japan, Australia and New Zealand, means that intra-regional trade and investment would be boosted significantly in the region.

As Bangladesh is not part of the free trading bloc, there are risks of reduction in exports to Asean countries and of the rich countries of the bloc limiting investments to the regional countries, he said.

"Therefore, Bangladesh needs to be proactive in signing FTAs with Asean, improve our infrastructure, ease investment regulations and remove bureaucratic red tape," Selim Raihan said.

BGMEA President Rubana Huq said by 2030, Asean as a bloc would be the 4th largest economy in the world and to enter that market Bangladesh should negotiate signing an FTA with a Rules of Origin clause favourable to the Asean states.

She said the BGMEA itself has identified eight sectors for diversification of products and recommends forming an export diversification council as the country till date has been heavily dependent on the apparel sector for export earnings.

Metropolitan Chamber of Commerce and Industry President Nihad Kabir advocated for a pro-active and comprehensive trade policy, taking lessons from Bangladesh's competitors that are doing better in terms of drawing foreign investments and boosting exports.

She said Bangladesh should appoint trade representatives overseas to promote trade and woo foreign investments.

When there are talks of signing FTAs, the National Board of Revenue says it reduces revenue, she said, added that signing FTAs would actually help boost domestic revenue in the long run.

"We need targeted and coordinated action, not scattered ones," Nihad Kabir said.

According to official data, readymade garments are still the major export item to the Asean market, and that can still be increased.

The second position is held by pharmaceutical products, and export of these drugs can be boosted significantly if the drug companies are allowed to set up offices in the destination countries.

Bangladesh Ambassador to Vietnam Samina Naz said the presence of highly skilled labour and government policy support are the major factors behind Vietnam going ahead of Bangladesh in terms of export as well as wooing foreign investments.

However, Vietnam could be a good market for Bangladesh's pharmaceutical products, she said.

Foreign Secretary Masud Bin Momen, who chaired the webinar, said in order for Bangladesh to attain its goal of reaching an export figure of $60 billion by the turn of the year, the performance on the South East Asian front has to be much better.

He asked all the high commissioners and ambassadors to find ways and means to boost export to Asean states and send reports to the ministry.

Additional Secretary (East) to the foreign ministry Mashfee Binte Shams suggested that the missions in the Asean countries forge strategic partnerships with prominent trade bodies and chambers in the host country to organise single country or product fairs.