WB opposes signing bilateral FTA’s: Dhaka fails to narrow trade gap with SAARC states
New Nation | 12 October 2008
WB opposes signing bilateral FTA’s: Dhaka fails to narrow trade gap with SAARC states
Syful Islam
Opposition from World Bank keeps Bangladesh away from signing bilateral Free Trade Agreement (FTA) with SAARC member countries, a top official of the Commerce Ministry said yesterday.
"We want to sign FTA with member states of South Asian Association for Regional Cooperation (SAARC). But World Bank is opposing the signing deal arguing that other existing agreements are enough for bilateral trade," the high official said preferring anonymity.
The top official said there are several FTA’s among the SAARC member countries. "But when we take any initiative to sign FTA. The World Bank opposes the move and we do not get approval from the high level, he said.
Bangladesh has received proposals for signing FTA’s from SAARC countries such as India, Pakistan and Sri Lanka. In August Bhutan proposed the same at a meeting between Bangladesh’s Commerce Secretary Feroz Ahmed and Bhutans Economic Affairs Secretary Dasho Sonan Tshering in Thimphu. However, in the meeting Commerce Secretary Feroz Ahmed could not give any positive reply to his counterpart other than saying, " Signing of FTA’s require a major policy decision by the government."
Informed sources said the government is studying the costs, benefits and implications of signing of the FTA’s. "The process will also require consultations with stakeholders and their views and opinions have to be taken into account."
In the Thimphu meeting Feroz Ahmed said, "As SAFTA has already come into force signing of FTA’s with SAARC member countries will have to be SAFTA plus and has to include other components." He also stated about the need to create the conditions and basis including through confidence building measures such as early harvest programme before FAT’s can be signed.
Joint Secretary of the Ministry of Commerce and head of FTA cell Mustafa Mohiuddin said Bangladesh can bridge the huge trade imbalance with SAARC member countries through signing the FAT’s. Bangladesh has huge trade gap with giant India.
He said there is no possibility of signing FTA’s with the SAARC member countries due to various factors. However, he did not elaborate the reasons.
Earlier a report of World Bank titled ’India-Bangladesh Trade, Trade Policies and Potential Free Trade Agreement’ said, "India and Bangladesh could still greatly benefit from cooperation in other areas, without necessarily implementing an FTA. There is no compelling case for India and Bangladesh to pursue a bilateral FTA. A broader-based liberalisation would be more beneficial for both countries."
"Improvements in the transport, storage and administrative infrastructure at land borders would yield substantial benefits. Greater harmonisation and cooperation in Customs administration and banking relationships would also be highly beneficial."
The study suggests improved infrastructure at land border Customs posts; streamlined Customs procedures and administration; expanded facilities at smaller Customs border post. Added to this, Bangladesh needs to bring down its protective tariffs to levels closer to those of its competitors in South Asia and elsewhere, it said.
