Bangladesh needs free trade agreement with the UK
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Bangladesh needs to sign a free of charge Trade Agreement (FTA) with the united kingdom if it hopes to improve bilateral trade and private sector investment between your two countries, according to various local businessmen.
The UK is Bangladesh's third-largest export destination with last year's shipments amounting to practically $3.5 billion, which garment items accounted for a lot more than 93 per cent.
In fiscal 2018-19, Bangladeshi exports to the UK totalled $4.8 billion. However, the ongoing coronavirus pandemic has disrupted trade between your two countries.
Aside from being a major export destination, the united kingdom acts as a hub for Bangladeshi shipments to other areas of Europe.
Besides, the UK offers a considerable about of foreign direct investment (FDI) for Bangladesh as a lot more than 200 British companies currently have $2.5 billion committed to the country.
It is for these reasons and the significant historical relationship between the two nations that the united kingdom can be an integral part of Bangladesh's global trade.
A lot more than seven lakh Bangladeshis now have a home in the united kingdom for education or business-related purposes if not as naturalised citizens.
Subsequently, a huge number of citizens of Bangladeshi origin get excited about important business and political procedures in the UK therefore, the island nation has developed into very important trade partner for Bangladesh.
Since the Bangladeshi population in the united kingdom is fairly considerable, the demand for local foods like rice, fruits and fish has risen there.
And so, enough time has come to sign an FTA with the united kingdom so that Bangladesh can take full benefit of any potential business deals when Britain exits the EU trade bloc towards the end of the entire year.
Although the British government has already assured that Bangladesh will continue steadily to enjoy zero-duty benefits even after Brexit because of its status as a least-developed country, local businessmen want the two nations to sign an FTA to secure future benefits.
"We must diversify our exports to the united kingdom. Pran has been mixed up in UK and other foreign markets for quite some time now," said Ahsan Khan Chowdhury, chairman and ceo of Pran-RFL.
The demand in the united kingdom for his company's products such as for example bread, biscuits and other locally produced foods is increasing as a result of massive ethnic diversity present there.
Moreover, Bangladesh may be the highest bicycle supplier to the united kingdom, he said, adding that Pran-RFL exports 40,000 units to the united kingdom every month.
"Therefore, we are looking for signing an FTA with this essential market," he said at a virtual discussion on 'exploring trade and FDI opportunities with the UK', organised by the Dhaka Chamber of Commerce and Industry (DCCI).
Faraaz A Rahim, executive director of Rahimafrooz Storage Power Business, relayed his company's success story of exporting batteries to the UK.
"We have enough scope to widen our exports to the UK. Aside from apparel items, my company's success in exporting batteries can be an example. So, we must form a strategic partnership with the united kingdom soon."
Besides, creating a platform for battery manufacturers and trading partners of Bangladesh and the united kingdom is vital to increasing outgoing battery shipments.
Since it stands, the global market for batteries happens to be worth a lot more than $59 billion, which leaves lots of room for Bangladesh to seize a greater share, Rahim added.
Hardly any local companies export pharmaceutical goods to the UK even though the demand for cheap medication is quite high there, said Abdul Muktadir, chairman and managing director of Incepta Pharmaceuticals.
Similar to other products, the united kingdom could become a bridge for Bangladeshi pharmaceuticals to attain other Europe as the country's Medicines and Healthcare products Regulatory Agency (MHRA) is well recognised in your community.
If Bangladesh's pharmaceuticals companies are registered with the MHRA, it will require Bangladesh's drug manufacturing sector to new heights.
After Incepta was registered with the MHRA, buyers in the UK paid $11 per pack for the same medicine that buyers from the UAE offered $3 for, Muktadir said.
Most of the generic medicines obtainable in the UK is stated in India.
Therefore, Bangladesh may possibly also benefit from the UK market if it builds a solid relationship with the united states, he added.
Aside from apparel products, Bangladesh could export a whole lot of other items like jute goods, pharmaceuticals and footwear to the UK, said Hossain Khaled, managing director of the Anwar Band of Industries.
The UK's imports amounted to $692 billion in fiscal 2019-20 therefore, as a leading export nation, Bangladesh can grab a greater share of the market.
Khaled also urged British entrepreneurs to purchase Bangladesh's automotive industry while adding that the united states needs to improve its ranking on the World Bank's Simple Doing Business Index.
In fiscal 2019-20, 13 % the country's total software exports were destined for the united kingdom, said Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS).
While third regarding overall export, the UK may be the second-largest export destination for locally developed software.
But still, Bangladesh can export 10 times a lot more than the prevailing trend to the UK.
Kabir also asked the federal government to supply British investors with the scope to determine professional robotic software companies at the high-tech parks in Bangladesh.
Asif Ibrahim, a director of the Bangladesh Garment Manufacturers and Exporters Association, urged British investors to relocate their businesses to Bangladesh and establish more man-made fibre textile factories.
Investors from the UK could spend money on Fintech, a listed financial services company of Bangladesh, he added.
Since Bangladesh enjoys duty-free benefits with China, British investors could make the most by setting up their factories here, said Abul Kasem Khan, chairman of the Business Initiative Leading Development.
That is why signing an FTA is essential for Bangladesh, he added.
Bangladesh needs to learn whether signing an FTA is indeed crucial at this juncture as the united states already enjoys preferential duty privileges with several developing and developed countries because of its classification as a least developed country, said Sharifa Khan, additional secretary (FTA) to the commerce ministry.
Besides, these facilities will continue until 2027, the ultimate year of Bangladesh's graduation to a developing country. THE UNITED KINGDOM government also previously announced that tariffs will be cut substantially next year.
The prevailing import tariffs will come down from no more than 20 to 10 % to 5 or 2 % according to the product's nature.
"So, we must take good thing about this change," Khan said.
The country has tremendous potential to do business with the united kingdom, said Robert Chatterton Dickson, the British high commissioner to Bangladesh.
However, there is a wider issue accessible: Bangladesh's have to improve its simple doing business ranking, he added.
In 2018, FDI from the UK to Bangladesh stood at $370 million, which is 10 % of the total amount that flew for the reason that year, said Selim Raihan, executive director of South Asian Network on Economic Modelling, while presenting a keynote paper.
Although FDI from the united kingdom to Asia totalled £186.46 billion in 2018, Bangladesh's share of this amount was just 0.37 %, Raihan said.
A number of the obstacles for the country to attracting FDIs from the united kingdom are its narrow export basket, inadequate policies and strategies, weak collective action from non-garment sectors, weak enforcement of intellectual property rights, high cost of doing business and slow implementation of infrastructural projects.
The chambers of commerce in Britain have no idea of Bangladesh's potential as a supplier, said Saida Muna Tasneem, Bangladesh's high commissioner to the united kingdom.
She continued to demand the establishment of strong trade and investment-related relationship with the united kingdom to address the problem as Bangladesh has the possibility to export light engineering products and other value-added garment items to the market.
The UK may be the second-largest foreign investor in Bangladesh, registering accumulated an FDI stock around $2.45 billion as of March, said DCCI President Shams Mahmud, who moderated the discussion.
He also asked the concerned agencies of both countries to undertake the steps needed and dialogues to sign an FTA with a concentrate on comprehensive economic integration.
Md. Shahriar Alam, the state minister for Foreign Affairs, said that his government will soon form a Bangladesh UK (BG UK) Commission for holding a day-long business dialogue yearly in a bid to improve trade and investment between the two countries.
Source: https://www.thedailystar.net
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