The bilateral trade relations between Turkey and Bangladesh are old enough and it has a strong historical and cultural roots. In recent era, Bangladesh and Turkey are among each other’s key trading partners and bilateral trade between the two countries is worth about $1 billion. Turkey could be a great destination for Ready Made Garment (RMG) products of Bangladesh if Free Trade Agreement (FTA) is finalized. At present, all Bangladeshi product, except RMG items, are enjoying zero duty benefit in Turkish market. Despite potentials, Bangladesh failed to achieve expected export earnings growth in Turkey as Turkey imposed high duty on Bangladeshi products in 2010. As a least developed country, Bangladesh is supposed to get duty-free, quota-free (DFQF) market access to the country. If that cannot be achieved, the first preference could be to have a bilateral FTA with Turkey to avail preferential market access.
Recently the Turkish Exporters’ Assembly and the Federation of Bangladesh Chambers of Commerce and Industry organized the Turkey-Bangladesh Business Forum in Dhaka city on 23 August. Commerce minister Tofail Ahmed, Turkish ambassador to Bangladesh Devrim OZTURK, FBCCI president Md Shafiul Islam Mohiuddin, FBCCI’s First Vice President Sheikh Fazle Fahim and Turkish Exporters’ Assembly member of sector council Basaran Bayrak were present among others in the B2B meeting. The visit of Turkish business delegation would expedite trade and business relations between the two countries.
Figure 1: FBCCI and Turkey Business Forum shakes hands after signing MoU.
In this event, Tofail Ahmed urged the Turkish government to speed up the efforts for signing a free trade agreement to boost bilateral trade and business between the two nations as political and cultural co-operation between Turkey and Bangladesh is very close. He also said that Bangladesh was getting duty-free quota-free market access to the European Union, but not in the Turkish market as the country is not included in the European economic block.
“Now we are very much interested to sign a free trade agreement to tap the potentials of trade and investment,” the commerce minister said. “We held the first round of meeting for singing FTA while the second round of meeting is yet to be held. I will request the ambassador of Turkey and the visiting business delegation to discuss the issue with your government and arrange the second round of meeting,” Tofail added.
Bangladeshi export items to Turkey have been dominated by apparel products. Since 2012, Bangladesh and Turkey have been in talks to sign a free trade agreement, but signing of the agreement is halted due to the complications relating to Turkey’s bid for accession to the European Union.
Basaran BAYRAK, the chief of Turkish business delegation, said that the free trade agreement between Turkey and Bangladesh is under process. We are not here only to increase our exports to Bangladesh. We are here also to increase the business of Bangladesh in Turkey.
|Table 1: Trade position between Bangladesh and Turkey|
|Year||Export in million USD||Import in million USD||Trade Balance to Bangladesh|
According to the information provided by the Central Bank of Bangladesh, net foreign direct investment (FDI) inflows to Turkey in Bangladesh in the fiscal year 2015-2016 realized as 1.41 million USD and as of June 2016, the total FDI stock in Bangladesh has been 11.9 million USD. The minister offered the facility of special economic zone for the Turkish businesses.
“Bangladesh is one of the fastest growing economies in the world and Turkish companies can take the strategic advantage of labor-intensive manufacturing in Bangladesh,” he said. He urged Turkish companies to make investment in infrastructure and pharmaceutical sectors.
|Table 2: Export-Import commodities list of Bangladesh with Turkey|
|Main Export Commodities||Main Import Commodities|
|Jute and jute goods,
Manmade filament and staple fibres,
leather, ceramics etc.
|Iron and steel construction material,
Parts and accessories
Milk and milk products,
Machines and their components,
Devrim OZTURK said that Turkey signed free trade agreement with four countries and the discussion is still going on over the FTA with Bangladesh. Expressing expectation, he said that the next FTA discussion with Bangladesh would be held as soon as possible.
Devrim said that the strategic location of Turkey is important for geo-politics and the economy of the country is a global success story. Assuring about the political stability in Turkey, he said that business was not hampered due to the recent political turmoil, which did not pose any impact on daily life.
The envoy said that there were huge scope to increase bilateral business between two countries and the business forum would help to strengthen the bilateral business ties.
Bangladesh and Turkey have signed a joint protocol on trade and investment in 2012. The Bangladesh-Turkey Joint Economic Commission has been holding biennial meetings to discuss the ways for increasing bilateral trade and investment.
Md Shafiul Islam Mohiuddin, FBCCI president, said that the Turkey-Bangladesh Business Forum would open the window of more cooperation and both the nations can take advantage in the area of trade and investment.
He urged Turkish businesses to work hand in hand to strengthen bilateral trade relations removing all the barriers and he requested businesses of both countries to go forward targeting bilateral trade worth $5 billion within few years.
He urged Turkish companies to make investment in pharmaceutical, leather and infrastructure sectors in Bangladesh.
Bangladesh exports to Turkey stood at $631.63 million in the financial year 2016-17, above 80 percent accounts for RMG products, while imports were worth $212.30 million in the period, according to the Export Promotion Bureau. If the FTA is signed between two countries, Bangladesh RMG sector’s new market venture will find a new dimension. However, apart from RMG, there are areas of business, which could be collaborated jointly with Turkey like agriculture, frozen food, pharmaceuticals and handicrafts. These areas, including RMG, were highlighted by the Turkey delegates in the B2B meeting program.