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Bangladesh is set to ink a deal with Eurasian Economic Union (EEU) in November to expand trade and commerce including duty-free market access to Russia and tap export potential in East European markets, officials said.
A high-powered delegation of Eurasian Economic Commission (EAEC) will visit Bangladesh from November 15-19 in order to sign a memorandum of understanding (MoU) between Bangladesh and EEU member states.
The EEU comprises five northern Eurasian countries such as Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. These nations have common customs border and a single market of 183 million people and gross domestic product of over US$ 4.0 trillion.
The ministry of commerce (MoC) has recently finalised the draft of a memorandum of understanding (MoU) in this regard which earlier the EEU had forwarded to Bangladesh embassy in Moscow, the officials added.
A senior trade official told the FE that after finalizing the MoU, it was sent again to the EEU through the foreign ministry for their final look.
"We think that signing the MoU with the EEU is urgent to expand the market for Bangladeshi goods there," a high official of the foreign ministry said.
The EAEC confirmed the Bangladesh embassy in Moscow about the delegation's visit to Bangladesh. Tatyana Valovaya, member of the board of EAEC, will lead the delegation of 1+3 members.
The goal of the cooperation between the parties within the framework of this deal is to promote trade and economic relations and comprehensive cooperation between EEU member states and Bangladesh towards a higher volume of mutual trade and investments, elimination of barriers to trade and investment flows and closer collaboration in areas of mutual interests, according to the draft MoU.
The official said despite having immense potential of Bangladeshi goods in East European countries, the market access is still very limited. Presently, Bangladeshi goods have to take a detour to enter these countries mainly through Germany and Turkey.
Signing the MoU will open the door for direct entry of goods, leading to an increase in export to those countries, he said.
"We are also interested to sign the agreement to create an environment for seeking duty-free market access to Russia for which we are trying for over ten years," he said.
Trade officials said Russia, being a member of EEU, is now not eligible for negotiating with Bangladesh bilaterally on duty-free market access since the country shares common border with other member nations in the group.
Bangladesh will have to negotiate with the EEU to get free market access of products to any of EEU member countries. Signing the MoU with the EEU may create a scope for getting duty-free access to the bloc, the officials think.
Bangladeshi goods have immense potential on the Russian market. Export of Bangladeshi products to Russia has increased fivefold during the last five years, amounting to US$ 314.292 million in the fiscal year 2015-16.
Bangladesh mainly exports apparels, jute, frozen foods, tea, leather, home textiles and ceramic products. Its imports include cereals, minerals, chemical products, plastic products, metal, machinery and mechanical equipment, a senior MoC official said.
Statistics show that Bangladesh's export of goods to EEU member states is on the rise with $ 321.91 million turnover in the last fiscal year from $ 302 million in FY 2014-15.
Bangladesh enjoys duty-and quota-free market access to the European Union having 28 members. Signing the deal with the EEU is a good initiative of the government. It will significantly enhance the country's foreign currency earning, a businessman said.
"The deal might pave way for getting duty free market access to Russia and other Eurasian countries if it is done," additional Secretary (Export 2) of commerce ministry Tapan Kanti Ghosh told the FE.