Bangladesh moves toward signing FTA with US

Bangladesh is taking steps toward signing a zero-tariff deal or a Free Trade Agreement (FTA) with the USA in a bid to enhance bilateral trade and investment, according to sources.

The Ministry of Commerce (MoC) on Monday formed a high-powered committee to prepare a draft deal and submit it to the commerce secretary within the next 15 days, they said.

According to the terms of reference (ToR), the eight-member body will identify applicable sectors for inclusion in the proposed agreement by giving highest priority to protect the country's interests, trade growth, investment, etc.

The committee would review the recent free-trade agreements between the US and other countries, if necessary. Besides, necessary additions and subtractions can be made to the draft in the light of the ongoing negotiation experience of Bangladesh.

The commerce ministry is currently working to sign FTAs with more than two dozen countries. It has so far signed the lone PTA (Preferential Trade Agreement) with Bhutan, which came into effect on July 1, 2022.

"Feasibility study comes first. Then we can decide on a deal. In fact, we will sign a FTA or PTA with a country only when it is financially and economically viable for our country," said a commerce ministry official.

A bilateral free-trade or preferential-trade pact is a matter of negotiation between two countries. The objectives of FTAs are to achieve zero tariffs between the two signatory countries and reduce trade barriers. No country will agree to a deal if it goes against its interests.

A senior commerce ministry official admitted that progress on negotiating bilateral FTAs with some countries is on the slow lane.

The government is working sincerely on FTA and PTA issues but progress is slow due to delays by potential partner countries, according to the official.

Signing FTAs with some countries may not be feasible for Bangladesh as it could cause heavy revenue losses, according to trade officials.

The process of signing FTAs with some countries is currently at the negotiating stage.

Discussions are underway to sign FTAs and CEPAs with Indonesia, the Eurasian Economic Union (EAEU), Thailand, Malaysia, China, Turkey, APTA, ASEAN, Australia, the GCC, Japan, the Philippines, South Korea, MERCOSUR (The Southern Common Market) and Singapore.

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