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An economic partnership agreement (EPA) between South Korea and Bangladesh can boost bilateral trade, Korean Ambassador to Bangladesh Park Young-sik said in Dhaka on Thursday, stressing the need for additional efforts by both countries to revive and accelerate trade growth.
It can provide an impetus to increase Bangladesh's share in Korea's ready-made garment (RMG) imports, he said at a discussion with the members of Overseas Correspondents Association of Bangladesh (OCAB) at a local club.
"I believe that the current market share of 5.0 per cent is low and there is further potential to significantly increase this market presence of RMG in Korea," said the Ambassador.
He added that Korea imports RMG products mainly from China, which benefits from a bilateral free trade agreement (FTA), and the Regional Comprehensive Economic Partnership (RCEP); Vietnam (bilateral FTA, Korea-ASEAN FTA, and RCEP); and Indonesia (bilateral CEPA, Korea-ASEAN FTA, and RCEP).
These countries hold a competitive advantage in the Korean market due to their FTAs with Korea, he noted.
The Korean ambassador was upbeat about Bangladesh's future, saying that Bangladesh has rich human resources and can ask other negotiating countries to expand the movement of professionals in the services sector.
Bangladesh will face an oversupply of nurses in near future, he said, citing an example.
Bangladesh can also ask the other negotiating countries to establish the cooperation platform and request that country to transfer technology in many fields like in deep-sea fishing, he said.
Despite having potential, bilateral trade between Korea and Bangladesh has not grown since reaching its peak at around US$3.0 billion in 2022, he pointed out.
"Bangladesh should focus not just on the quantity, but the quality of its economic growth," he said, adding that the quality of economic growth must be driven by innovation, knowledge and technology areas where foreign companies can make substantial contributions.
The ambassador said Bangladesh needs to boost its manufacturing sector for rapid economic growth.
High tariffs on raw materials and intermediate materials should be reduced to promote the domestic manufacturing sector, said the ambassador, adding that Bangladeshi companies are now more engaged in trading rather than in the manufacturing sector.
Talking further on Bangladesh's trade sector, Ambassador Park said there should be expansions in existing sectors such as RMG, jute, footwear, pharmaceuticals and light industrial goods.
New items can be added, and trade can also be diverted from other countries due to the FTA that Dhaka is negotiating with South Korea and several other countries, he said.
Stressing the need for bringing in more direct foreign investment, the ambassador said the FDI in Bangladesh is the lowest in terms of the gross domestic product (GDP) at 0.75 per cent as compared to India's 1.7 per cent and Vietnam's 4.7 per cent.
Merely offering incentives is not enough, he said, adding that improvement is needed in simplifying visa procedures, customs clearance, rational tax and tariff policy, repatriation of profit with no holding tax. Actual implementation on the ground in tackling corruption is required, he said.
The envoy said attracting FDI also requires comfortable living conditions in the host countries.
Bangladesh, he said, needs to make best efforts to attract FDI from China and Middle East countries as they are not closely integrated with the International financial market.
The companies of Western countries, Japan and Korea do not have sufficient capital and they have to borrow capital from banks.
OCAB president Nazrul Islam Mithu presided over the event, while its general secretary Julhas Alam delivered the welcome speech.
Azizjst@yahoo.com