Md. Joynal Abdin
The Independent on October 8, 2019
The weave of global free market concept is near to death now. Hope for the free market trade was initiated by the World Trade Center (WTO) under its inspiring agreements as a part of multilateral trade negotiations. Several rounds of WTO showed light for free movement of goods, services even manpower from least developing countries to the developed markets. WTO was successful to negotiate a long list of agreements like Agreement on Agriculture, Agreement on the Application of Sanitary and Phytosanitary Measures, Agreement on Technical Barriers to Trade, Agreement on Trade Related Investment Measures, Agreement on Anti-Dumping, Agreement on Customs Valuation, Agreement on Pre-shipment Inspection, Agreement on Rules of Origin, Agreement on Import Licensing Procedures, Agreement on Subsidies and Countervailing Measures, Agreement on Safeguards, General Agreement on Trade in Services, Agreement on Trade-Related Aspects of Intellectual Property Rights, Agreement on Government Procurement, and Trade Facilitation Agreement etc. within last three decades. But major challenge bring forward while the agreements started to be enforce in practice. First attract was led by USA who refuses to implement DFQFMA to the LDCs and introduced a condition of 97% products, they had selected these 97% so list of products so comprehensively for the countries that all major export items of the LDC countries like Bangladesh went out of 97%. Various counter proposals were placed and standard, compliance and conditions etc. forms of restrictions made the negotiation complex and time consuming.
As the multilateral platform of trade negotiation i.e. WTO became time consuming to conclude the negotiations regional and bilateral trade arrangements became popular in many parts of the world. Some regional initiatives like ASEAN Free Trade Area (AFTA), ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), Asia-Pacific Trade Agreement (APTA), Central American Integration System (SICA), Central European Free Trade Agreement (CEFTA), Common Market for Eastern and Southern Africa (COMESA), Commonwealth of Independent States Free Trade Area (CISFTA), Greater Arab Free Trade Area (GAFTA), Dominican Republic–Central America Free Trade Agreement (DR-CAFTA), East African Community (EAC), Eurasian Economic Union (EAEU), European Economic Area (EEA; European Union–Norway–Iceland–Liechtenstein), European Free Trade Association (EFTA), European Union Customs Union (EUCU; European Union–Turkey–Monaco–San Marino–Andorra), G-3 Free Trade Agreement (G-3), Gulf Cooperation Council (GCC), North American Free Trade Agreement (NAFTA) (Pending replacement by USMCA), Pacific Alliance Free Trade Area (PAFTA), South Asian Free Trade Area (SAFTA), Southern African Development Community Free Trade Area (SADCFTA) and Southern Common Market (MERCOSUR) etc. became successfully signed and fewer has been implemented within short period of time. As a result regional free trade agreement concept became popular around the globe.
But due to various geo-political reason most of the regional free trade agreement became vulnerable. Therefore; countries sought closer connection and quicker implementation based on mutual negotiations of two partnering countries. Today thousands of bilateral free trade agreements are in force around the world. Major advantages of bilateral free trade agreements are two specific partners, easy to negotiate and implement, free from geographical location barriers, strategic alliance building and similar interest in other multilateral platforms as well.
As a result bilateral free trade agreements are becoming popular day by day. Multilateral free trade agreements under WTO is in doubt now, how long these agreements will take to be fully implementing, how far these agreements can serve the objectives is questionable today. Rational of many multilateral agreements many be obsolete before coming into force.
Similarly; future of regional free trade agreements are also depending upon many political factors like SAFTA lose its charisma due to rival political relationship of our two largest neighbors. Brexit threatened future of EU like anything. US views regarding Mexico overshadowed the shine of NAFTA and very recently trade war between China and US is threatening all multilateral trade relationship to be collapsed any time. US-Turkey-Russia or US-Iran-Russia, Syria-Russia-US, India-Kashmir-Pakistan and Iran-Soudi-US etc. equations are having black shadow on every multilateral trade regime every moment. In this practicality the only way out to have a strong partnership in international trade remains in hand that it the bilateral free trade agreements. But unfortunately Bangladesh is lagging behind in this avenue. It is yet to sign any bilateral free trade agreements with any partner countries. So many bilateral proposals are in feasibility study mode.
But to maintain a steady international trade regime Bangladesh shall initiate free trade agreement talk with major export destinations.
Not only the export destination but we have to have win-win relationship with the raw material supplying countries as well.
Two major confusions we have before going for bilateral free trade agreement signing; these are which countries shall we prefer? Secondly what counter facilities could we offer? If we can prefer the trading partners we have trade surplus now; we can offer sectors that we have potentials but we are lagging behind for example tourism; technical education etc. could be open-up us for the partnering countries for signing bilateral free trade agreements. Bangladeshi export item diversification is a much talked issue but no specific time bound action plan is available till date to diversify what items into what variety within what period. Government’s emergency and smart (specific, measurable, achievable, realistic and time bound) action is very urgent in this regard. Major exportable items of Bangladesh are in threatened condition now. Anytime RMG sector may face anti-dumping types of barriers in any country. Bangladeshi leather sector is in front of a deep crisis. Last Eid-ul-Adha gave a very serious sign for the leather sector. If serious effort has not be given then we may have to start export of raw hide again and its will make our leather goods sector uncompetitive. West Bengal Government is establishing the largest leather hub of the world in Kolkata. They are planning to employ 7.5 lac workers there. Why major leather producing country like Bangladesh is not planning to establish a one million employment leather hub in Dhaka.
Finally; we can state that, selecting appropriate mode i.e. bilateral free trade agreement with appropriate partnering countries is a need of the day. At the same time deciding sectors to offer for the counterpart’s investment and trade is another major task.
Diversification of exportable items is crying need of Bangladesh at this moment. Otherwise our RMG, Leather sector could be destroyed like Jute sector any time by anybody. Therefore; active, efficient and dedicated effort is required to plan, execute and maintain a prosperous trade regime for Bangladesh in coming days. Otherwise our aspiration as a developing nation may become nightmare and bounced back to the LDCs.