Bangladesh, Turkey near trade deal
Khabar South Asia
Bangladesh, Turkey near trade deal
The two countries moved closer to a trade deal during a recent two-day ministerial-level meeting in Dhaka.
By Syed Tashfin Chowdhury for Khabar South Asia in Dhaka
24 November 2012
Turkey is offering to pursue a Preferential Trade Agreement (PTA) with Bangladesh, but the two sides have not taken a potential Free Trade Agreement (FTA) off the table, officials said at a recent meeting of top economic officials here.
Garment workers ply their trade at a factory in Bangladesh. During a recent meeting in Dhaka, Turkish and Bangladeshi ministers discussed a duty that is hampering exports of ready-made garments to Turkey. [Munir Uz Zaman/AFP]
Garment workers ply their trade at a factory in Bangladesh. During a recent meeting in Dhaka, Turkish and Bangladeshi ministers discussed a duty that is hampering exports of ready-made garments to Turkey. [Munir Uz Zaman/AFP]
A six-member delegation led by Turkish Minister of Work and Social Security Faruk Celik met with Bangladesh officials led by Finance Minister Abul Maal Abdul Muhith at the fourth Joint Economic Commission meeting held November 11th and 12th in Dhaka.
The two sides have discussed forging an FTA in recent years aimed at boosting annual bilateral trade from $1 billion to $3 billion by 2015. However, at a news briefing following the meet, Muhith said Turkey has agreed to consider a PTA with Bangladesh.
"Turkey requires consent of the European Union for signing the Free Trade Agreement which is difficult for it at this moment," Muhith said.
Muhith hoped progress in the PTA could be made by the end of this year as Ankara, which is seeking EU membership, has already sought details from Dhaka.
The FTA is not off the table, Celik said. "We have requested the Bangladesh government to send the formal proposal on a free trade arrangement and then we will work on it," the Turkish minister said.
The PTA was one of several proposals discussed at the talks aimed at increasing bilateral trade and investment. The visiting delegation expressed interest in opening a Turkish International Co-operation and Development Agency (TIKA) office in Dhaka, a government agency which promotes social and economic development in other countries.
According to Dhaka officials, Ankara has express eagerness to invest in Bangladesh’s rapidly growing construction and gas-exploration sectors.
Ankara has also promised to provide Dhaka a credit of $300 million for oil imports, which is crucial for oil imports required to run power plants amid a gruelling power crisis.
Bangladesh, meanwhile, asked Turkey to waive a crippling 17.5% duty on apparel imports from Least Developed Countries (LDCs) that came into effect in 2010. The export of ready-made garments accounts for 80% of Bangladesh’s export earnings.
Exports to Turkey have fallen since then, Shafiul Islam Mohiuddin, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Khabar South Asia.
"Although Bangladesh’s ready-made garments sector managed to export around $550m-worth of goods in fiscal year 2011-2012 despite the new duty, the export earning has dropped significantly from previous year’s revenue of $724m prior to the duty," he said.
The Turkish side pointed out that Bangladesh pays a much lower rate than developing nations (36.6%) and developed countries (42%).
Economists urged Bangladesh to maintain healthy relations with Turkey in spite of any disagreement over duty fees.
Zaid Bakht, research director at the Bangladesh Institute of Development Studies, said Bangladesh needs to strengthen its ties with emerging economies like Turkey.
"The EU, Bangladesh’s second biggest export destination, is already affected by the debt crisis. Hence, our entrepreneurs need to diversify their export-destination list by trying to sell Bangladeshi products to countries like Turkey," Bakht told Khabar.
"Any kind of initiative with Turkey, with whom Bangladesh has enjoyed a healthy relationship since its independence in 1971, is necessary," Delwar Hossain, professor of International Relations at Dhaka University, told Khabar.
Hossain lamented that such important discussions by Bangladesh with other nations often end abruptly when there is a change in government of Bangladesh. "Dhaka needs to pursue such discussions regardless of the government in power," he said.
