Bangladesh has missed a trade expansion opportunity as it stayed away from the Regional Comprehensive Economic Partnership (RCEP), an initiative led by China to create a free trade area of 16 countries in the Asia Pacific region, experts say.
This proposed 16 countries would constitute the world's biggest free trade bloc both in terms of market size and share of global economy.
Analysts say Bangladesh should have joined the negotiations which entered a final stage in Bangkok earlier this month. Bangladesh will miss out on the potentials of a huge market access to overcome the post-LDC shocks, they argue.
But not all who have their eyes set on the country's future are in agreement. Some say Bangladesh first needs to enhance its export capacity to reap benefit from such regional trade blocs.
Some peg their argument on how the very idea of RCEP sprang out of the crisis that China finds itself now. Badly hit by the US tariff war, China is working vigorously to make its foothold stronger in the Asia Pacific under its 16-nation Regional
Comprehensive Economic Partnership (RCEP) initiative, they say.
India opted out of the deal in the last minute in fear of floods of cheap imports from China and dairy products from Australia and New Zealand, which, it thought, would affect local manufacturers and farmers. India suffered a $53billion trade deficit with
China in the last fiscal year.
This did not stop other 15 countries – 10 Association of Southeast Asian Nations (ASEAN) countries plus China, Japan, South Korea, Australia and New Zealand – from agreeing in Bangkok on November 4 on signing a deal in February next year to have free trade among themselves.
Even without India, which is poised to become the third-largest consumer market in the world, the RCEP bloc will account for a third of global GDP and have a market of nearly a third of the world's population.
Trade negotiators and business groups in India felt that being on the free trade pact could help Indian industry benefit from global supply chains for high-end goods and offset slowdown as the country's economic growth fell to a six-year low.
But why Bangladesh remains unconcerned about such activities of regional trade integration amid tensions of US-China tariff war? The question has dawned on many who feel that joining would have been the best option.
The moot question they bring to the fore – should Bangladesh have been onboard the regional platform and become party to the ongoing parley?
This very same question has annoyed Manzur Ahmed, a trade analyst and former adviser to FBCCI on tariff issues.
'Is it like asking a hungry man if he should eat rice! You need market access, but you are sitting idle when regional players seem to be scrambling for a bigger and freer market,' he said.
"RCEP has not yet come to a close. Before that, we could have joined the ASEAN on the same terms we have set our relationship with India. Why didn't we do it?" he asked.
As former director of the apex trade body FBCCI, Ahmed is worried to see that Bangladesh's market access is gradually squeezing as it faces trouble in EU market and might be out of US market as the world's largest economy has been inking future market agreements with India and many other countries in Asia and Africa.
"We'll have to have some trade partners left to do business with when we will graduate from the LDC category in 2024. But no apparent initiative is there to prepare for the future," he said.
Bangladesh Foreign Trade Institute chief executive officer Ali Ahmed holds the same view: "We are getting duty-free access to China, Japan, Australia, New Zealand, which we won't enjoy after 2024. If we had joined RCEP, we could have had a wider option as do our competitors such as Vietnam, China, Cambodia."
Bangladesh has not even applied for it, nor Dhaka was approached, maybe for its current LDC status. "But LDCs like Myanmar, Cambodia, Laos are there. Still, there is time for us to apply," Ali Ahmed places his argument with a hint of optimism, adding that he will raise the issue to government high-ups soon.
Mohammad Rakib Uddin Bhuiyan, chairman of the Department of International Business of Dhaka University, however, holds a contradictory view. He believes that joining trade bloc one after another will not benefit Bangladesh unless the trade capacity is enhanced.
"We are already members of many such groups – BIMSTEC, SAFTA, APTA. What benefits have we derived so far? Striking another deal is not a big win, rather we need to raise our capacity," he said.
The Dhaka University teacher referred to India's decision to pull out of the RCEP parley to protect the interest of local producers. "We also need to think whether our manufacturers will survive if we enter such an agreement and allow duty-free imports of ASEAN or other countries."
Dr Muhammad Mahboob Ali, professor of Dhaka School of Economics, said joining a trade bloc and accessing a bigger market would not help much if Bangladesh cannot diversify its export basket much beyond readymade garments. He referred to many such regional blocs Bangladesh has been associated with and pointed to the fact that nothing significant could be gained so far because of limited export strength.
"Yet, we cannot overlook regional integration. We need to assess our benefit before we join," said Prof Mahboob.