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Trade with the Mercosur-member states would benefit Bangladesh subject to signing a free trade area (FTA) deal.
A recent official study found the potential and recommended going for the FTA with the South American trading bloc of Argentina, Brazil, Paraguay, Uruguay and Venezuela, arguing it would benefit Bangladesh's trade.
Bangladesh has enormous untapped trade potentials in the region with having very low possibility of losing revenue, according to the study findings.
The study viewed that the Mercosur bloc could be a potential export market for Bangladeshi products, especially readymade garment (RMG) now. But the tariff rate for exporting to the market is still very high - the bloc imposes 35 per cent tariff on export of Bangladeshi goods.
There is a huge possibility to export apparel products, pharmaceuticals, plastics, tobacco, tableware, leather and leather goods, textile, etc. in the Mercosur member states if the FTA is signed, the study added.
The Mercosur is a very big trade zone with significant possibility of increasing Bangladeshi export to those member states if the tariff is reduced to zero, it said.
"We can take the trade preference through signing the FTA with Brazil. Export volume of RMG to the South American country would be increased," said a commerce ministry official.
"We can sign bilateral agreement with the Mercosur and if they reduce the duty, it will be a good market for the country's RMG. Besides, achievement of Sustainable Development Goals (SDGs) and products diversification initiatives of the government would become easy," he added.
There is no Bangladesh-Brazil Chamber of Commerce and Industry in the country. Currently, there are 29 foreign chambers with Bangladesh. Bangladesh will be benefited if a chamber is formed between Bangladesh and Brazil, said a businessman.
There is a good trade relation between Bangladesh and Brazil for a long period of time. Brazil is interested to increase trade with Bangladesh, the official said.
He also said that Bangladesh's relation with Brazil is intermediate. The businesses should set up a trade body to increase direct trade.
The commerce ministry will hold discussion with the stakeholders, especially private sector, before starting negotiation with the Mercosur about signing the FTA.
During fiscal the year (FY) 2017-18, Bangladesh earned an amount of US$ 208 million through exporting goods to the Mercosur states while Brazil alone imported goods worth US$ 176.89 million from Bangladesh.
Major export items from Bangladesh to Brazil are knitwear, woven garments, vegetable textile fibres etc.
On the other hand, import from Brazil stood at US$ 1,520.61 million in FY 2017-18.
Major import items from Brazil are sugar and sugar confectionery, cotton, ships and animal or vegetable oils etc.
There are 300 million people in the Mercosur member states.