Bangladesh requires a more comprehensive trade strategy

In my keep going article in The Daily Star, I wrote that Bangladesh needs to urgently act to wthhold the GSP+ facility post-LDC status. And, that Bangladesh could also opt for negotiating a Free Trade Arrangement (FTA) with the EU to be able to gain permanent duty-free gain access to for Bangladeshi products in to the vast EU market.

Actually if Bangladesh attains GSP+ in the EU, this will get us duty-free access for our goods, including apparel, only in the EU countries. While the EU is by far the major marketplace for Bangladesh, our exports would simply represent a fraction of the merchandise in the EU market-remember as well that the EU no more includes the uk as a result of Brexit. The UK once was one of Bangladesh's greatest marketplaces in the EU, specifically for clothing.

Indeed, GSP+ will never be applicable for additional essential Bangladeshi garment export marketplaces, e.g. Canada, New Zealand, Japan, Australia, India, China, UK. Most of these are important markets for Bangladeshi attire; and many of these are growing rapidly when it comes to their middle income (India and China, specifically).

Rising in this article the cloud, Bangladesh must urgently step forward to secure her "market" heading the FTA way-negotiating bilateral Free of charge Trade Agreements (FTAs) besides also getting into the mega Regional Trade Agreements (RTAs). Going for limited Preferential Trade Agreements (PTAs) would barely suffice. If we do not begin the process nowadays, we risk staying left behind by some of our key monetary opponents in the global garment development space.

What are our opponents doing?


Asean member claims (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and their FTA partners (China, Japan, India, Southern Korea, Australia and New Zealand) are negotiating the Regional Complete Economic Partnership (RCEP). The 15 RCEP member countries take into account about thirty percent of global populace (2.2 billion persons) and thirty percent of global GDP (USD 26.2 trillion). Which makes RCEP the largest trading bloc ever sold. RCEP would quickly become even much larger, economically. Remaining beyond RCEP, Bangladesh will be at serious drawback vis-à-vis some of its key rivals. We need to produce every effort-politically-to enter RCEP, now.

Likewise, Bangladesh is not a area of the 11-country Trans-Pacific economical bloc i.e. Trans-Pacific Partnership (TTP) which was struck in February 2016. In the post-Trump period, this trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and america, now has every likelihood of being revived.


Many of Bangladesh's major export market segments are in TTPA, i.e. Japan, USA and Canada, to mention three. Meanwhile, Vietnam-likewise a TTPA member-along with Malaysia happen to be major rivals to Bangladesh, the ex - especially so. Vietnam, in particular, is our most immediate, like-for-like competitor.

The writing on the wall is clear: if Bangladesh does not take part in the mega (regional) RTAs or bilateral FTAs (with key export partners) around the world right now, our exports will be at a competitive disadvantage when tariffs from competition will be low in a couple of years beneath the FTAs/RTAs. In a sector as price-sensitive as apparel, actually small price and price shifts can have large ramifications. A number of the global makes engaged in Bangladesh previously recognise that about the continuing future of their sourcing footprint (from Bangladesh).

Equally at play may be the global pandemic. The pandemic offers placed huge stress on our garment sector together with our public finance. Continue, our trade policies should be re-aligned, re-drawn plainly and strategically to element in the affect of the pandemic and take into account different competing priorities that have emerged because of this of the pandemic. We work in an exceedingly different global trading scenery in comparison to what we were 12 months ago.

Bangladesh now has the 43rd largest market, globally. Economies that will be comparatively smaller contain entered into FTAs long back-to open up their economies, to trade with countries, to protected their competitive edge. Worthy of noting are the methods Vietnam engaged with EU on a bilateral FTA a decade back, whereas India is still in debate with the EU. Countries consider an FTA in a wider zoom lens and matrix compared to the long-held notion of tariff adjustment or to "protect" domestic competitive sectors-essentially for an FTA to safe and sound her overall "economic benefits", not simply tariff gains. Let's likewise accept an FTA can be negotiated as a distinctive mixture of economic-political- social-environmental trade-offs.

Today Bangladeshi exporters yearn for the federal government to immediately draft a list of 8-10 countries large enough that could be of probable "interest" or perhaps "gain" for the Bangladeshi market. We should weigh creating and tapping political leverages with a perspective to engaging on forthcoming FTAs-both RTAs (like RCEP) and bilateral FTAs.

This might require intense, unforeseen, complex diplomatic manoeuvres that may take years, as the RTAs (like RCEP, TTPA) mentioned above illustrate. The technical dynamics of the finer information on FTAs are often enormously hard to thrash out, domestically (within Bangladesh) to start with. Finding prevalent, mutually beneficial ground isn't straightforward aswell. Experiences of other countries express that preparations for an FTA need economy-wide and in addition sector-specific evaluation across manufacturing and offerings sectors.

Similarly fundamental is for us to develop a comprehensive "national exports strategy", with a vision for the short, mid- and long-term. Not just to job excel-based export numbers for export destinations!

We've set ambitious targets during the past on this front. While USD 50 billion in attire exports may seem far away now, specifically having been through the pandemic, there is absolutely no harm in aiming huge. Lofty and ambitious goals happen to be fine-presented our leaders can outline a comprehensive roadmap of how exactly to achieve every minute stage, practically, as likewise address any unforeseen situation along the journey.

Time is of the essence, clearly. I wish, we're able to have started yesterday.

As Bangladesh opts to move, I would sincerely plea that the government engages in wide open, deeper "consultations" with the individual sector (not only "meetings") with chambers of commerce, industry associations (like BGMEA, BKMEA) up to involvement of suspect tanks and other diverse experts. Bangladesh demands its brightest and sharpest thoughts at the desk as the issues are reviewed and thrashed out and different ideas and choices are believed on how to go forward.