Govt thrust on FTAs, PTAs to overcome post-LDC challenges

Bangladesh will have to utilise the period from 2022 to 2026 with farsightedness to make sure it can march forward as a developing nation after graduating from the group of least developed countries (LDCs), Finance Minister AHM Mustafa Kamal has said.

While presenting the FY23 budget in parliament on Thursday, he also mentioned that the government, as part of its multifarious steps to successfully deal with the potential trade challenges arising from the LDC graduation, has adopted the policy to execute bilateral free trade agreements (FTAs) and preferential trade agreements (PTAs) with major trade partners.

The government has already signed a PTA with Bhutan, under which 34 products of Bhutan will enjoy duty-free access to Bangladesh while 100 Bangladeshi products will enjoy the same benefit in the Bhutanese market, Minister Kamal maintained.

In addition, a prioritisation list for the execution of bilateral trade agreements with 13 countries and trade and economic blocs, including India, China, Japan, Singapore, Indonesia, Sri Lanka, Malaysia, Nepal, USA, Canada, Eurasian Economic Union, Asean, and Mercosur, has been prepared, he continued, adding that a preliminary draft of the Regional Trade Agreement (RTA) Policy Guideline has been prepared, aiming to sign bilateral trade agreements with various countries.

He also said the ongoing development process must continue to ensure smooth graduation. In this context, seven sub-committees are preparing draft strategies with a time-bound action plan to meet the challenges that are likely to arise following the LDC graduation.

Referring to what challenges Bangladesh is going face after its LDC graduation, the finance minister in his budget speech said the country will lose the duty-free, quota-free, unilateral, and preferential market access, while the scope for concessional or low-interest funding from international and bilateral development partners will reduce. Besides, the country will lose the LDC-specific benefits it is currently enjoying at the WTO, such as exemption from the obligations of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

"The loss of the LDC-specific benefits will create an obligation for us to increase our productive capacity and efficiency to compete in the export market, diversify our export basket, and create new markets. Besides, this will both encourage and force us to go for higher value-added products," said the minister.

Abul Kasem Khan, former president of the Dhaka Chamber of Commerce and Industry (DCCI), told The Business Standard that LDC graduation is an issue outside the budget, so it is not necessary to discuss it in detail in the budget.

"We have to face the post-LDC graduation challenges through continuous development in all sectors of the country. Only bilateral trade agreements will not prove enough in this respect."

Notwithstanding that Bangladesh has a short time in hand to prepare for the post-LDC challenges, the pace of progress in this area is very slow.

"We are lagging far behind the developing countries in market competitiveness. If we want to compete with them efficiently, we need to increase our participation in regional forums."