Bilateral Free Trade Agreement · Economic Integration · Globalization · Regional Free Trade Area · Regionalism

Should Bangladesh go for bilateral FTA?

Should Bangladesh go for bilateral FTA?

Md. Joynal Abdin

The Financial Express on March 24, 2010

It is strange that bilateral free trade agreement (BFTA) became so popular in the era of globalization. In the beginning it was regional free trade agreement among countries sharing borders. Now, these are signed between countries which have no common borders.

In Asia Singapore has signed the highest number of FTAs, estimated at 34 with developed as well as developing countries. India, trails it with 33 FTAs. The third position goes to Pakistan with 26 FTAs. The follow table shows the Asian countries in terms of signing FTAs.

The table shows Bangladesh in the 27th position among Asian countries, with 6 FTAs. The Maldives with 2 FTAs is at the bottom of 20 Asian nations in this regard.

There seems to be a definite importance in signing bilateral agreements. The policy makers in Bangladesh stressed signing bilateral free trade agreements with the neighbouring countries first. A dozen more offers of bilateral free trade agreements, including from the US, awaits decisions from Bangladesh.

But all the bilateral agreements can not give similar results. Bangladesh must analyse each proposal on its merit. The possible future impact of  BFTAs on the national economy has also to be studied. By ignoring these questions Bangladesh, or any country, would only stand to lose.

Some experts tend to mix up the issue of a bilateral with India with the issues of regional connectivity and transit. These issues should be considered and analysed separately. For example some people argue that unless a BFTA is signed India would not allow Nepal and Bhutan to access  Bangladesh.

 

SL Country

 

Under Negotiation

Concluded

Total

Proposed

FrameworkAgreement Signed/UnderNegotiation

Under Negotiation

Signed

In Effect

1

Singapore

5

0

9

2

18

34

2

India

12

4

6

1

10

33

3

Pakistan

10

5

3

2

6

26

4

China, People’s Republic of

8

2

4

1

9

24

5

Korea, Republic of

8

1

8

1

6

24

6

Thailand

6

4

3

0

11

24

7

Australia

6

1

5

0

8

20

8

Japan

4

0

5

0

11

20

9

Malaysia

3

1

5

2

8

19

10

Indonesia

6

1

1

1

7

16

11

New Zealand

4

0

3

1

7

15

12

Brunei Darussalam

4

0

1

0

8

13

13

Philippines

4

0

1

0

7

12

14

Kazakhstan

2

1

0

3

5

11

15

Lao PDR

2

0

1

0

8

11

16

Tajikistan

2

0

0

7

2

11

17

Uzbekistan

1

0

0

7

3

11

18

Viet Nam

2

0

2

0

7

11

19

Georgia

0

0

0

2

8

10

20

KyrgyzRepublic

1

0

0

2

7

10

21

Myanmar

2

1

1

0

6

10

22

Armenia

0

0

0

2

7

9

23

Azerbaijan

0

0

0

6

3

9

24

Cambodia

2

0

1

0

6

9

25

Sri Lanka

2

1

0

1

4

8

26

Taipei,China

1

1

1

0

4

7

27

Bangladesh

0

2

1

1

2

6

28

Papua New Guinea

1

0

1

0

4

6

29

FijiIslands

1

0

1

0

3

5

30

Solomon Islands

1

0

1

0

3

5

 Before signing an FTA with India, Bangladesh needs to know what advantages it would get out of it. Some Indian companies are processing nuts in different southern EPZs of Bangladesh for export to India. The Indian firms are importing nuts from Myanmar and processing them in Bangladesh for export to India. They enjoy all the facilities Bangladesh offers in EPZ areas, without creating much employment here. This investment is not for adding value here.

 

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p style=”text-align:justify;”>Bangladesh should go for FTA to retain its competitive advantage rather than offering  competitive advantage to others. FTAs with out doing the home work could land Bangladesh into troubles. It would be harmful to the domestic small and medium enterprises. 

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