The Daily Star (Dhaka) | 19 December 2004
Assess strengths, needs before going for FTA
Speakers tell business session on bilateral FTA possibility
Star Business Report
Speakers at a business session yesterday said Bangladesh and Malaysia can strike a bilateral free trade agreement (FTA) after taking into account the strengths and needs of both these countries.
Bangladesh-Malaysia Chamber of Commerce & Industry (BMCCI) organised the session on ’Trade Regime in Post Geneva Perspective : Free Trade Agreement the impact on OIC countries in South and Southeast Asia would an FTA between Bangladesh and Malaysia be an appropriate response ?’ as part of the first Bangladesh Malaysia Business Forum.
Law Minister Moudud Ahmed attended the session as chief guest while President of International Chamber of Commerce-Bangladesh Mahbubur Rahman chaired the event at Sonargaon Hotel in Dhaka yesterday.
Chairman of Bangladesh Enterprise Institute Farooq Sobhan said prospect for a bilateral FTA is in the offing and Bangladesh needs duty free access for its products to Malaysia.
Malaysia has many industries that need to be relocated and Bangladesh can be a potential place for them, he said observing the country can be a very attractive destination for investment from Malaysia.
As Bangladesh is a least developed country (LDC), it has market access to European Union, Canada, Japan, New Zealand, Australia, he said.
Pharmaceutical products can be exported from here till 2016 without having patent rights, which is another advantage. Besides, it has substantial labour force, he added.
Mahbubur Rahman said WTO recognises regional trade agreements (RTAs) and free trade agreements (FTAs) but that cannot be the answer for the future of overall trade.
"We don’t need FTAs if WTO is a free and fair trade organisation," he said.
In his speech, Moudud said Bangladesh was earlier dependent on food aid and also foreign assistance for its development activities but situation has now changed.
"Food production has increased substantially and we don’t have shortage of food anymore. Besides, we can fund our development budget up to 58 percent," he added.
President of the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) Abdul Awal Mintoo said Bangladesh is the gateway between the trade blocs of Asean and Saarc, which is to be connected by the proposed Asian Highway.
"Our export possibilities have also expanded significantly due to our induction in the regional blocs/FTAs. Safta is going to be implemented by 2006. As a result, we may take advantage of our geographical location for exporting to North-eastern states of India apart from trade with Nepal and Bhutan," he added.
The big export giants may lose their competitiveness due to cost escalation resulting from continuous growth. This is going to happen, for example, in China due to the fact that cost of their production will go up as oil price is rising, the FBCCI president added.
Mintoo observed China has to restructure its banking and financial credit institutions under world pressure. Besides, it will have to revalue its currency, which is now undervalued by 30 to 35 percent.
President of Dhaka Chamber of Commerce & Industry (DCCI) Sayeeful Islam said investment should come from Malaysia if there is a FTA between the two countries.
"Malaysian entrepreneurs should invest here but FTA should not only focus on products. Sending more workers in Malaysia should also be considered," he said.
Islam said both the governments should consider establishing training institutions for training workers to meet the needs of Malaysia.