The Daily Star (Dhaka) | 2007-09-10
Govt to study impact of free trade deals with neighbours
Jasim Uddin Khan
The caretaker government has initiated a study on the impact of striking free trade agreements (FTAs) with India, Pakistan and Sri Lanka.
Sources said the commerce ministry has asked Bangladesh Tariff Commission to assess the benefits and disadvantages of inking FTAs with the three South Asian nations.
Talking to The Daily Star, Tariff Commission Chairman Md Shafiqul Islam said the report is expected to complete in the next few days.
Before finalising such a report, the commission is now examining the study reports prepared by World Bank and two other reports from experts, and also ascertaining merits and demerits of some recently accords on free trade.
A senior official of the Ministry of Commerce said soon after the receiving the assessment report, a dialogue with the trade bodies concerned, think tanks, economists and researchers will be organised.
The official expects that this dialogue would help adopt a strategy by the year-end in line with the national interest.
A government expert on international trade negotiation however cautioned that the free trade deals could pose some threats to smaller countries.
Many organisations associated with free trade also have reservations about individual FTA.
A recent World Bank report said, "There was no compelling case for India and Bangladesh to pursue a bilateral free trade agreement."
"A broader based liberalisation would be more beneficial for both the countries," the report remarked.
However a tariff commission member pointed to the positive impact of the three-year-old FTA between India and Sri Lanka, from which the latter has gained substantially.
He said as the South Asian Free Trade Area had so far been largely ineffective in the wake of increasing intra-regional trade, utilisation of individual FTA could be a way forward.
Intra-regional trade among the South Asian nations is only around five percent of the overall trade of the member countries.
Experts say trade within the region is hit not only by tariff barriers but also by bureaucratic bottlenecks, political mistrust and weak transportation links.