Bangladesh and Bhutan agreed to start negotiations over signing a preferential trade agreement to boost trade and investment between the two countries.
The decision was made at the sixth commerce secretary-level meeting held at Cox’s Bazar in Bangladesh in December 21-22.
The negotiations for signing either a free trade agreement or preferential trade agreement will begin at the earliest, said members of the Bangladesh delegation to the meeting.
Commerce secretary Shubhashish Bose led the Bangladesh side while the Bhutanese delegation was headed by Bhutan’s economic affairs ministry secretary Dasho Yeshi Wangdi.
At the meeting, Bangladesh also allowed duty-free market access for Bhutan’s limestone powder in addition to 18 other products that are enjoying the facility, meeting sources said.
Bangladesh, however, rejected a proposal of providing duty-free market access for another 16 Bhutanese products on the grounds that a trade preference scheme between the two countries is absent, they added.
Bangladesh is unable to allow duty-free market access to more Bhutanese products unless a World Trade Organisation-compatible platform of exchanging trade preference scheme between the two countries is established as Bhutan is not a member of the WTO, said Mohammad Ehteshamul Hoque, a first secretary (customs modernisation and international affairs) of the National Board of Revenue.
The WTO does not encourage providing preferential market access without any appropriate trading platform, he said, adding ‘as a WTO member, Bangladesh has the responsibility to act as per WTO spirit’.
On the other hand, a Bangladesh’s proposal over seeking duty-free access for its 10 products to the Bhutanese market also remains pending as the landlocked country informed that completion of internal procedures including discussion in its parliament was a lengthy process.
The products for which Bangladesh sought market access include pineapple juice, guava juice, orange juice, green tea in package, mineral water, particle board, plywood, men’s/boys’ jackets and blazer, men’s/boys’ trousers and shorts, and babies garments.
In this context, both sides agreed to discuss the issues during PTA/FTA negations, he said.
Officials said that during the fifth commerce secretary-level meeting held in March in Bhutan, Bangladesh shared a template for PTA which was now being examined by Bhutan.
They said that a preferential trade agreement would be beneficial for both sides as the level of bilateral trade between the two countries was very low in terms of total trade and number of products.
Annual trade volume between the two countries remained about $36 million in last fiscal year, which was heavily in favour of Bhutan.
Ehtesham, also a member of the Bangladesh delegation to the December 21-22 meeting, said that a statutory regulatory order allowing duty-free access for limestone powder from Bhutan would be issued soon.
Both sides also agreed to expedite implementation of the memorandum of understandings signed last April on the use of inland water transport routes of Bangladesh by Bhutan for transit and bilateral trade.
Finalisation of the standard operating procedures for implementation of the MoU is crucial for boosting bilateral trade and transit facilities, meeting sources said.
The first meeting of the joint technical committee will be held soon in Bangladesh and the committee would conduct field visit to identify riverine routes and port facilities.
Both sides also decided to hold second joint working group meeting on transit agreement in Bhutan to resolve the pending issues including bank guarantee, clause on entry and validity of the agreement and finalise the draft protocol.
Regarding Bangladesh, Bhutan, India and Nepal Motor Vehicles Agreement, Bhutan informed that the other three countries could go ahead with the agreement as it was not ratified by the upper house of Bhutan parliament.
Bhutan would join as and when it would be ready.
At the December 21-22 meeting, Bangladesh requested Bhutan for issuing business visa to businesspeople for longer time instead of the existing one month.
Exchange of information related to bilateral trade and investment, cooperation between trade associations of both countries and enhancing cooperation in the tourism sector also got importance at the meeting.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Trade & Commerce