According to an earlier timeline set by the CDP, Bangladesh was set to leave the LDC category in 2024. However, given the COVID-19 pandemic and taking note of a request by the Bangladesh government the graduation year was deferred by two years, i.e., in 2026. However, how many days are passing, the concern to cope with the new status is becoming more visible.
Keeping this in mind Bangladesh is focusing on bilateral free and preferential trade deals as a strategy to overcome the possible losses of global trade concessions after its graduation to a developing economy.
Studies on the feasibility of signing Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) with several countries have been completed already.
According to an official document, the countries and organizations include Malaysia, Vietnam, Thailand, Japan and Eurasian Economic Commission.
The possibility of Bangladesh signing such trade agreements with China, Myanmar, Nigeria, Mali, Macedonia, Mauritius, Jordan, the USA, Iraq and Lebanon is also being analyzed.
Also, a Comprehensive Economic Partnership Agreement (CEPA) between Bangladesh and India is in progress.
Bangladesh Foreign Trade Institute (BFTI) and the Indian Foreign Trade Institute are preparing a report on a joint study on CEPA, which is a bit different from FTAs as it covers a lot of issues such as trade in goods and services, investment, intellectual property rights and e-commerce.
Bangladesh has signed a bilateral PTA with Bhutan on 6 December 2020. Under the agreement, 34 Bhutanese products will get duty-free access to the Bangladeshi market and 100 Bangladesh products to get similar access to Bhutan.
The commodities from Bangladesh include baby clothes and clothing accessories, men’s trousers and shorts, jackets and blazers, jute and jute goods, leather and leather goods, dry cell battery, fan, watch, potato, condensed milk, cement, toothbrush, plywood, particleboard, mineral and carbonated water, green tea, orange juice, pineapple juice, and guava juice.
The 34 products from Bhutan that will get duty-free access to the Bangladesh market include orange, apple, ginger, fruit juice, milk, natural honey, wheat flour, homogenized preparations of jams, fruit jellies, marmalades, food preparations of soybeans, mineral water, wheat bran, quartzite, cement clinker, limestone, wooden particle boards, and wooden furniture.
Both the countries will be able to increase the number of items gradually through consultation.
PTA negotiations with Nepal are at the final stage. Bangladesh has demanded zero-duty benefits on the export of 140 products to Nepal.
Significant progress has also been made informal talks aimed at signing a bilateral PTA with Indonesia.
Work on a joint study aimed at conducting a free trade agreement with Sri Lanka is at the final stage.
Bangladesh has formally initiated negotiations with the Association of South-East Asian Nations (ASEAN) to sign a free trade agreement to enjoy greater market access in the bloc after graduating from the least developed country grouping. Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam are the AESAN countries. If Bangladesh can sign an FTA with the ASEAN, it does not need to sign any bilateral agreement with any of the 11 member countries of the bloc.
In addition, to increase competitiveness in exports, the document mentioned that the government has continued to provide export incentives to 36 products as in the previous fiscal year.
The government has identified 17 products to boost exports in the aftermath of the epidemic, which is expected to play a strong role in sustaining export growth after Bangladesh transitions from the least developed countries in 2026.
To reduce the trade deficit, the document said, measures are being taken to remove tariff and non-tariff barriers by executing bilateral trade agreements. Such agreements have already been signed by 44 countries.
Bangladesh, as per the rules and regulations of the World Trade Organization (WTO), might lose some of its businesses as it will graduate from the LDC status.
Bangladesh ministry of commerce had taken an initiative to prepare a draft guideline titled ‘Policy Guidelines for Preferential Trade Agreement (PTA)/Free Trade Agreement (FTA)-2020’, that asked the Bangladesh Trade and Tariff Commission (BTTC) to update the existing policy guidelines for FTA-2010 by incorporating changing patterns of global and domestic trade.
In the 2010 guidelines, the FTAs are mainly focused on goods and services. The new guidelines will have issues such as intellectual property rights, technology and the environment. Global trade pattern has changed in the last decade and developed countries focus on emerging issues while signing FTAs or PTAs.