Mercosur countries keen to sign FTA with Bangladesh
Image collected
Higher tariff up to 35% on imports from Bangladesh and conservative trade policy are key barriers the manufacturers, especially of apparel goods, face in entering into export markets of Argentina, Brazil, Paraguay and Uruguay.
The countries have agreed to sign free trade agreement (FTA) to increase bilateral trade with Bangladesh by removing the trade barriers.
Mercosur, officially Southern Common Market, is a South American trade bloc comprising Argentina, Brazil, Paraguay and Uruguay with three crore people and high purchase power with $3.4 trillion GDP. The average per capita income is $12,000.
Commerce Minister Tipu Munshi and BGMEA President Rubana Huq came up with observations at a press conference on Wednesday where they shared experience of their recent visit to the Mercosur countries.
A delegation including government officials and private sector people, led by the commerce minister, visited Argentina, Brazil, Paraguay and Uruguay in between August 18 and August 23 to explore new markets for Bangladesh exports.
“It is very difficult to enter into export markets in Mercosur countries especially Brazil for various reasons. Firstly, the import duty is 35%, which reaches up to 60% with the internal taxes. Secondly, the business people are very conservative and they do not want to increase their imports,” said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Rubana Huq.
"Bangladesh exports to Mercosur is very small — a little over $200 million, whereas our imports from those countries stand at over $2 billion, a trade deficit of $1.8 billion," said the trade leader.
The minister also echoed her.
“Mercosur trade bloc is very important for Bangladesh in terms of exports as this alliance has 30 crore consumers with $3.4 trillion GDP,” said Tipu Munshi.
If Bangladesh could reduce tariff through free trade agreement, exports to these country including apparel goods, medicine, leather and leather goods would increase, said the minister.
The block, however, expressed their keen interest to export beef to Bangladesh, he said, adding that right now the government would not encourage it considering the local farmers.
Bangladesh to host expo in Brazil
To make the Mercosur countries familiar with Bangladeshi goods and targeting the Brazil consumers, Bangladesh is going to organize a two-day exposition at São Paulo on November 7 and 8.
To overcome the challenges and improve trade, improving products quality and continued commutation were very important, said Rubana Huq.
"As part of this, we are going to host a two-day expo to display our goods to attract consumers," she added.
Source: https://www.dhakatribune.com