The Independent Bangladesh
FTA offers little benefits to weaker economies: Seminar
Wednesday, 20 February 2008
Bangladesh should be careful about the impacts of South Asian Free Trade Agreement (SAFTA) and other proposed regional trade agreements as such preferential market access arrangements offer little benefits to weaker economies.
On the other hand such free market arrangements open the doors of opportunities for a big economy to create its captive market across the borders, a seminar in the city was told on Monday.
The seminar on ’Regional Trade Agreements in Asia Pacific: Their Impacts on Bangladesh’ was organised by the Federation of Bangladesh Chambers of Commerce and Industry in its conference room.
’An FTA with India may increase consumer surplus but is likely to have little or no impact on increasing Bangladesh’s manufacture exports to India’, warned Dr Hamid Rashid, director general of the ministry of foreign affairs in his keynote at the seminar. Rashid, an economist, who obtained his doctorate from the University of Columbia as a student of Nobel laureate and former World Bank chief economist Joseph E Stiglitz, feared that Bangladesh’s market might turn into a ’captive market’ for Indian exporters.
’An FTA with India is likely to be "trade diversionary"- there is no compelling case for an FTA with India’, he reminded. World Bank senior economist Dr Zaidi Sattar said Regional Trade Agreements might reduce the cost of industrialisation among beneficiary countries by easing procurement of intermediary products.
The renowned trade economist, who was the chief guest at the seminar, advised Bangladesh authorities to focus on export-led development. He suggested that a relaxed FTA like Asia Pacific Economy Cooperation (APAC) could be followed by Bangladesh while examining the potential of easy market access.
Several speakers at the seminar said steps should be taken to improve the skills of the government’s trade bureaucrats and the people concerned in the private sector chambers and trade bodies as they can contribute effectively in negotiating trade agreements.
Abdul Haque, former director of the FBCCI, and its former consultant SM Al Hossainy took part in the discussion moderated by FBCCI secretary general Syed Jamaluddin.