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Regional trade is not flourishing for higher duty in South Asia

Speakers at the South Asia Maritime and Logistics Forum suggested removing tax and political barriers among South Asian nations to flourish trade.

Desk Report

The South Asia Maritime and Logistics Forum is a major focus for global economic growth, trade and market expansion. It offers many business prospects for the global transportation industry. The Second SAMLF was held on 9 and 10 October under the joint aegis of the Ministry of Shipping of Bangladesh in association with Gateway Media private Ltd of India and Colombo International Maritime Conference Event (CIMC) of Sri Lank.

2nd South Asia Maritime and Logistics Forum
Figure: Prime Minister Sheikh Hasina inaugurated the two-day 2nd South Asia Maritime and Logistics Forum 2018 at hotel Le Méridien Dhaka on 9 October. Courtesy: focus bangla

Prime Minister Sheikh Hasina inaugurated the SAMLF in Dhaka, where ministers, secretaries and higher officials of the shipping sector-related trade and industry of 20 countries including India, Sri Lanka, Myanmar, Nepal, and 120 government and private representatives attended the program.

In five business sessions, speakers discussed on port infrastructure in South Asia, cargo transportation system, dredging, shipbuilding and intra-regional trade.

“We need to work to remove tariff and non-tariff barriers,” Commerce Secretary Shubhashish Bose said, attended as the moderator of a session on barriers to intraregional trade in SAMLF at Le Meridien Hotel in Dhaka.

“Despite agreeing to lower tariffs back in the 1980s, regional trade in South Asia is still not flourishing for higher duty,” said Shubhashish Bose.

The average tariff rate of the South Asian nations is 13.6 percent, which is more than double the global average of 6.3 percent.

As a result, the intra-regional trade volume among the South Asian nations is still 5 percent of their total annual foreign trade in a year, which is one of the lowest in the world.

It is not clearly stated in the South Asian Free Trade Area guideline how to phase out the sensitive lists of goods to eliminate the tariffs holding back trade among the South Asian nations, he added.

Md Nojibur Rahman, principal secretary to the prime minister, suggested to pursue a win-win situation and work on intra-regional trade in the world of a trade war.

On the second day, G Chandrashekhar, an Indian cotton trade expert discussed the cotton trade war between US and China. The US slapped 25 percent retaliatory duty so Chinese spinners buying cotton from India and as the demand rise possibility of increasing cotton price will arise.

As the world’s largest cotton producer, India estimated to produce 35.5 million bales in 2018-19. Cotton traders from both the countries have urged the government to launch a direct shipping line between the Pongan port and the Indian Vishakapatnam port to reduce freight time and charges. In order to compare and import goods, Bangladesh’s businesses can use the Krishnapatnam Port Container Terminal of Andhra Pradesh as it has the latest facilities.

“If an unlimited trade is guaranteed, South Asia will be benefited, the land ports will be united and related regulation will be co-ordinated”, said Gowher Rizvi, international affairs adviser to the prime minister.

Gowher Rizvi proposed to introduce cargo train service for export and import of India and Bangladesh. There are common law and education systems in the region, at least consolidated regional trade and at least interconnection. Gowher Rizvi said, “South Asian nations will rebuild a comprehensive connection”

After coming to power in 2009, Prime Minister Sheikh Hasina has added top priority to sub-regional communication. In recent times, the South Asian geographical region has become a major focus because of the global economic growth, trade and market expansion, it provides a great opportunity for the supply and expansion of marine-related services. The prime minister said the government has adopted the Blue Economy Policy to utilize this huge resources in the country’s socioeconomic development.

Referring to tackling the interconnected Delta Challenge in the areas of water security, food security and socio-economic development, and talking about flood, cyclone and drought such as natural disasters, Sheikh Hasina said, one of the main elements of the Delta Plan is the use of water resources by correcting the speed of GDP to increase.

The first South Asia Maritime and Logistics forum was held in Mumbai, Indian in September, 2017. The 3rd South Asia Maritime and Logistics Forum-2019 will be held in Dubai.

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