Daily Star (Dhaka) | Thursday, November 5, 2009
European FTAs with Asian countries may harm Bangladesh say trade analysts at a seminar
Star Business Report
The European Union’s bilateral free trade agreements (FTAs) with India, Southeast Asian nations and South Korea may be a potential threat to Bangladesh, officials of the European Commission said yesterday.
EU is the Bangladesh’s largest trade partner. Over half of the country’s total exports of $15 billion were destined to EU last fiscal year.
“The European Union’s FTA with India, Asean and South Korea is definitely a concern for Bangladesh,” Zillul Hye Razi, trade adviser to EC Delegation in Dhaka, told a seminar.
He cited the example of Bangladesh’s bicycle exports to EU under duty- and quota-free facility. India needs to pay high duty (17 percent) for bicycle exports to EU, but an FTA will remove this tariff barrier, putting Bangladesh in a fierce competition with rivals.
Commerce Minister Faruk Khan spoke as chief guest at the inaugural session of the seminar on “EU-Bangladesh trade relations: Trends and challenges” at Dhaka Sheraton Hotel.
Dr Stefan Frowein, head of delegation of the European Commission to Bangladesh, senior government officials, trade experts and businesspeople took part in the discussion.
Jenni Lundmark, trade programme manager of EU to Bangladesh, presented a paper on the European Commission’s trade-related technical assistance programmes in the country. Andrew Barnard, first secretary of the delegation of EC, moderated the session.
The EU has been in talks for FTAs with India, Asean (Association of Southeast Asian Nations) and South Korea since 2007. Negotiations with India and Korea are going on in full swing, while it is relatively slow with Asean due to political sensitivities and a lack of integration between the members of the bloc.
The discussants said Bangladesh needs a comprehensive trade policy.
Proper utilisation of GSP (generalised system of preferences) offered by Europe to least developed countries, including Bangladesh, is also vital, they said.
The FTAs of the EU with India, Asean and South Korea are the biggest challenge for Bangladesh’s future trade with Europe,” said Lundmark. Even Bangladesh’s garments exports may face a huge competition from these countries, she added.
Abdur Rahman, director of Export Promotion Bureau (EPB), said the government is considering an integrated trade policy merging export and import policies.