A vast market appears in sight as Bangladesh has formally proposed to the Eurasian Economic Union (EAEU) to strike free-trade agreement (FTA), officials say, as the country prepares for a socioeconomic status change.
The proposal was made last week on the back of a tip from the Eurasian Economic Commission (EEC) so that it could seek concurrence of its member-states-Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.
These five Eastern European countries have over US$1.5 billion annual bilateral trade with Bangladesh, which the commerce ministry officials think can increase manifold if a free-trade pact is inked.
The officials concerned say Bangladesh and the EEC signed a memorandum of cooperation in Moscow in May 2019 aiming to take forward bilateral trade. Later, a working group was formed to enhance trade and economic cooperation in 19 sectors.
The first meeting of the working group was held in November last in Moscow, with the Bangladesh side led by commerce ministry additional secretary Noor Md Mahbubul Haq while the EEC side headed by its board member Sergey Glaziev.
In the meeting the Bangladesh side had expressed interest in concluding an FTA with the EAEU and the EEC suggested sending a formal proposal in this regard.
A senior commerce ministry official told the FE Sunday Eurasia is a growing market for Bangladesh and also the bilateral trade is increasing substantially day by day.
He said the 19 sectors identified in the memorandum of cooperation would not be focused at a time, and thus Bangladesh initially prioritised trade in goods, services and investment.
Alongside these, he adds, the EEC added energy and a couple of sectors for starting work immediately.
"Our main target is Russian market," he says, adding that since Russia would not be able to sign any deal unilaterally, "we have to go through EAEU to get any facility there."
Bangladesh has already conducted a feasibility study and found that signing FTA with EAEU may yield positive results.
"After getting EEC's consent we will form a negotiation team and start formal talks," he says, preferring not to be named.
In fiscal year 2019-20 Bangladesh exported goods worth $398 million to EAEU- member states while imports from there cost $1.106 billion.
Ahead of formal graduation from the least-developed country (LDC) group in 2026,
Bangladesh has intensified its efforts to enter into FTA and Preferential Trade Agreement (PTA) deals with potential trade partners to make up for eventual GSP loses in the western countries after it graduates into developing-country group.
Bangladesh signed first bilateral PTA with Bhutan in December 2020 and was advancing talks on trade pact with a number of countries which include India, Indonesia, Malaysia, and Sri Lanka.