Bangkok keen to sign FTA with Dhaka
Dhaka Tribune - 22 August 2021
Bangkok keen to sign FTA with Dhaka
High tariffs on Thai products are stifling exports to Bangladesh to the desired level in spite of high demand, says a Thai official
Thailand is interested to sign a free trade agreement (FTA) with Bangladesh to increase bilateral trade as tariff and non-tariff barriers stand in the way of promoting business potentials between the two countries.
Thai trade counselor in Dhaka Khemathat Archawathamrong expressed this view while talking to Dhaka Tribune recently.
He said that high tariffs on Thai products are stifling exports to Bangladesh to the desired level in spite of high demand.
Bangladesh has become a member of the middle-income group this year with its economy growing at 7-8% per annum before the Covid-19 outbreak last year.
Citing high tariff and non tariff barrier (NTB) as bottlenecks in promoting trade, the Thai Minister Counsellor (Commercial) demanded removal of both the predicaments.
Referring to high level meetings between two countries in Bangkok on several occasions, he also said that Thailand has raised the issue of high tariff and has urged Bangladesh to reduce high tariff on Thai products.
Citing an example, he said Bangladesh imposes some 62.50% on rice and 89.32% tax on mango.
Further, mango import is banned until August in Bangladesh.
Emphasizing increasing trade between the two countries, he said prior to the Covid-19 pandemic, both sides had agreed to set a target of $2 billion in 2020, in the JTC meeting held in Bangkok.
He believes that Thai products are getting popular in Bangladesh with the expansion of the local economy.
Meanwhile, Bangladesh Foreign Minister Dr AK Abdul Momen in a meeting with Bangladeshi diplomats working in Asean countries stressed on increasing trade within the regions.
Former Commerce Minister Tofail Ahmed while opening the Thai trade exhibition in Dhaka in 2018 showed his interest in signing an FTA with Thailand. The agreement has to cover all major areas of cooperation, such as trade in goods, services and investments, ensuring mutual benefits, Tofail Ahmed added.
Commerce Minister Tipu Munshi said Bangladesh is working to create sustainable trade facilities by signing Free Trade Agreements (FTAs) with different friendly countries.
Bangladesh has been a major beneficiary of an open market economy and globalization; naturally, the government will continue the practice of an open economy to encourage and facilitate businesses, he also said.
Apart from this, the discussion will also focus on how to strengthen the regional forums Bimstec and Asem.
To a question of recruiting Bangladeshi workers in Thailand, Khemathat Archawathamrong said that the pandemic has hit the economy and restricted movement of people.
He, however, said that the Thai fishing industry may review the situation when the pandemic is over and normalcy returns.
Dhaka asked Bangkok to revive the proposal of recruiting skilled, semi-skilled and unskilled Bangladeshi workers for its labour-deficit sectors.
In the past, the fishing industry wanted the government to work with authorities in Bangladesh to supply 50,000 workers to solve a labour shortage in Thailand’s growing fisheries industry.
Praising the role of microcredit in reducing poverty, Khemathat Archawathamrong said Thailand has introduced this model to uplift people out of poverty.
On complications in obtaining a Thai visa, he said he will discuss the issue with the relevant authorities in removing barriers and speeding up the visa process.
He has expressed the views that members of reputed and established trade bodies like the Federation of Bangladesh Chambers of Commerce and Industry) FBCCI, Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Metropolitan Chamber of Commerce and Industry (MCCI), DCCI, Bangladesh Chamber of Industries (BCI), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) can get privilege in getting Thai visa besides other reputed and established businessmen.
Meanwhile, in January 2020, Deputy Prime Minister and Commerce Minister of Thailand Jurin Laksanawisit at the fifth Thai-Bangladeshi Joint Trade Committee (JTC) meeting with Bangladesh Commerce Minister Tipu Munshu held in Bangkok laid emphasis on promoting trade between the two countries and focused on agriculture, fisheries, livestock, health services and transportation.
Thailand regards Bangladesh as an important strategic partner in terms of trade, investment and transportation. It was Thailand’s third-largest trading partner in South Asia in 2018, he said.
The $1.2 billion worth of annual trade between the countries includes $1.2 million worth of Thai exports to Bangladesh and $59 million worth of imports from Bangladesh.
Meanwhile, Dhaka requested Bangkok to expand duty and quota-free market or DFQF access facility to include more Bangladeshi products having export potential to Thailand.
It also handed over a list of 36 products for Thailand’s consideration in the review of DFQF list this year.
In the first 11 months of 2019, Thai imports from Bangladesh rose by 38.3% over the same period of 2018. And Thai interest is increasing in key products such as jute yarn, shoes and ready-made garments.
Thai direct investment in Bangladesh from 2006-2019 amounted to $1.5 billion, with much of it going into agro-industrial and agro-processing businesses, construction and hotels.
Bangladeshi direct investment in Thailand in the same period was worth $1.12 million.
The partners are in advantageous geographical proximity for mutual trade and extension of their trade across the region. Thailand is central to Southeast Asia and has infrastructure and policy in place to support investment in the form of development projects as the Eastern Economic Corridor, by which Bangladesh will be able to distribute its goods across the region and to East Asia. Bangladesh on the Indian Ocean has the modern infrastructure to facilitate Thai products and services in South Asia, the Middle East and Africa, he said.
Thailand is seeking to more closely link Ranong Port with Bangladesh’s Chittagong Port as a channel for transporting goods.
In the meeting Thai Commerce Minister JurinLaksanawisit invited Bangladeshi businesspeople to visit the international exhibitions held here annually, such as the Bangkok Gems and Jewellery Fair, Thaifex and Style Bangkok, and he urged Dhaka to pursue a free-trade agreement with Bangkok.
Meanwhile, after two decades, in July 2017, foreign ministers of Bangladesh and Thailand have termed the Seventh Joint Commission of the two countries a major milestone in bilateral relations.
The meeting held in Dhaka was the first of its kind in two decades.
The then foreign minister, AH Mahmood Ali, and his Thai counterpart Don Pramudwinai agreed that the meeting was a major milestone and a harbinger for a vibrant chapter in our bilateral relations.
Both sides were pleased at the cumulative Thai investment in Bangladesh to the tune of $1.5 billion and the recent investment proposal worth $250 million in the energy sector.
Former foreign minister Ali invited fresh Thai investment in tourism, Buddhist Circuit tourism, health, hospitality, food processing, taking advantage of the SEZs and IT Park.
Meanwhile, Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said that a free-trade agreement (FTA) involved cooperation between at least two countries to reduce trade barriers, such as quotas and tariffs, and to increase the trade of goods and services with each other.
Citing an example, Moazzem also said that the automotive industry of Thailand was the largest in South Asia.
Thailand can invest and establish an automotive assembly plant in Bangladesh so that the latter can re-export the automotive parts and components to Thailand, he added.
According to the Export Promotion Bureau of Bangladesh, some major import items from Thailand to Bangladesh are cement, cereals, plastic, man-made staple fibres, sugar and sugar confectionery, machinery and mechanical appliances, and cotton and cotton fabrics.
