Bangladesh and Australia have signed a Trade and Investment Framework Arrangement (Tifa) agreement, the first of its kind between the two countries.
Commerce Minister Tipu Munshi and Australian Trade Minister Dan Tehan signed the agreement at a virtual signing ceremony, the foreign ministry said in a press statement on Wednesday.
The framework is expected to provide a platform for institutional economic interaction and open new opportunities for trade and investment between the two countries.
Under the agreement, a joint working group will be formed with due representation from relevant sectors and sub-sectors. Australia has proposed hosting an inaugural meeting of the working group in early 2022.
Speaking at the signing ceremony, Minister Tipu Munshi said, "I am profoundly happy that Tifa has been signed in the year when Bangladesh is celebrating the Golden Jubilee of her Independence and the birth centenary of the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman."
He hoped that the agreement would address all relevant questions including retention of duty-free and quota-free treatment for Bangladesh after it graduates from being a least developed country, or LDC.
He also said the framework would address trade liberalisation, creating a conducive atmosphere for greater flow of investment and trade in services.
The minister invited Dan Tehan, the Australian minister for trade, tourism and investment, to visit Dhaka soon.
Accepting Tipu's invitation, Tehan promised to visit Bangladesh next year with a trade and investment delegation.
"The [Scott] Morrison government is working to energise and expand the trade and investment relationship between Australia and Bangladesh, to support jobs and business opportunities in both countries," said Tehan.
He assured Bangladesh of the continuation of the duty-free and quota-free treatment pending the next review, which is not scheduled in the foreseeable future.
"Australia has the potential to meet Bangladesh's increasing education, training, and energy needs. And we offer world-class expertise in agriculture and infrastructure development," he added.
Bangladesh-Australia bilateral trade has grown six times over the past decade, reaching $1.90 billion (A$2.6 billion) last year. RMG, agriculture, food, and education services were key drivers of this growth.
Despite not being an elaborate and legally binding agreement, Tifa can help add new trade items from both sides and facilitate bilateral trade and investment.
Bangladesh High Commissioner to Australia Sufiur Rahman and Australian High Commissioner to Bangladesh Jeremy Bruer also spoke at the event.
Sufiur said Australia can have Bangladesh as one of its major suppliers of manufactured goods.
"Australia can see Bangladesh as the entry point to the sub-regional market of over 300 million people," he added.
Earlier, in a report to the commerce ministry in December 2020, Sufiur Rahman said signing a Tifa deal with Australia would help the bilateral trade volume between the two countries to reach $5 billion.