Bangladesh should quickly begin negotiating with the United Kingdom (UK) for a Free Trade Agreement (FTA) to keep enjoying duty-free trade to the European country after the former's graduation to a least developed country in 2024.
Additionally, coordinated efforts should be made, and existing challenges should be addressed, to attract more Foreign Direct Investment (FDI) from the UK.
Speakers at a webinar on "Exploring Trade and FDI Opportunities with the UK" organised by the Dhaka Chamber of Commerce and Industry (DCCI) placed these suggestions, on Tuesday.
Dr Selim Raihan, executive director of South Asian Network on Economic Modelling, presented the keynote paper.
He said, "We are still not sure about the continuation of duty-free market access to the UK until 2027 [the three-year grace period after Bangladesh's LDC graduation] since this will require Bangladesh to avail the GSP plus from the EU (and the UK?)."
"However, getting the GSP plus in the EU (and the UK) market is not an automatic process as Bangladesh would have to address many outstanding issues, including labour rights," he added.
He suggested dialogue with the UK be initiated for free-trade and investment deals.
"An FTA negotiation takes a very long time, and I think Bangladesh should start it now as it may take four to five years to be finalised," he explained.
The UK is the second biggest trade partner of Bangladesh in Europe and the third largest globally, although the trade volume of Bangladesh saw a drop last year.
In fiscal year (FY) 2019-20, Bangladesh exported goods worth $3.45 billion to the UK, around 28.6 percent less than that in FY 2018-19, according to the DCCI.
Further, the UK is the second biggest foreign investor in Bangladesh, registering accumulated FDI stock of $2.45 billion as of March 2020. Currently, over 200 British companies are operating in Bangladesh.
As the post-Brexit state has led to new thought in the UK's economic development planning, Bangladeshi businessmen have expressed their hope that UK investments to Bangladesh will continue, serving mutual interests.
DCCI President Shams Mahmud said, "The UK's export market is crucial to sustaining our development journey. In the post pandemic and Brexit times, the British government can ensure a liberal tariff and trading system to support our export and local needs in the UK."
While speaking as the chief guest, Md Shahriar Alam, state minister for foreign affairs, said, "To bring more FDI from the UK, we need to intensify and broaden partnership dialogues under the proposed BD-UK joint Commission after Brexit."
He urged a business-to-business collaboration between the two countries.
"We also need to frame out a post-Covid new market strategy and establish a digital marketplace to promote Bangladeshi innovative products in UK markets," he added.
Saida Muna Tasneem, Bangladesh high commissioner to the UK, said the British chambers of commerce are not very aware of Bangladesh. "Establishing regular chamber-to-chamber communication is key to boosting trade and investment."
She also underscored the importance of product diversification. "Bangladeshi entrepreneurs have a good opportunity to tap the UK's halal market and light engineering sector. We should try to sustain the GSP beyond the LDC graduation."
Robert Chatterton Dickson, British high commissioner to Bangladesh, said the pharmaceuticals, IT, education, healthcare, service and financial sectors have the potential to attract UK investments. Also, a reduction in the cost of doing business and policy reforms are important to attract FDI.
"Bangla Bond on the London Stock Exchange has created an opportunity for the business community of both countries to work closely. We are also keen to strengthen our existing trade relations with Bangladesh," he added.