FTAs with India, Pakistan in favour of Bangladesh, suggests study

Dhaka, Oct 17 (UNI) Free Trade Agreements (FTAs) with India and Pakistan will create economic welfare benefits for Bangladesh in the form of lower prices and better quality and services, a study has suggested.

However, it failed to identify what the FTAs would consist of in addition to South Asia Free Trade Area (SAFTA).

Duty free imports with India would create economic welfare benefits for the impoverished country by considerably reducing losses for the producers while in an FTA with Pakistan it has ''little to lose'', the study 'Fesilbility Study on Bilateral FTA within SAARC Region' suggested.

Funded by the European Commission, the study report was presented by Prof Ayubur Rahman Bhuiyan of Dhaka University and India's Sunirmal Ray at a conference here yesterday.

Experts, present at the conference, criticised the perception-based study, as it fails to identify the issues that need to be addressed while considering FTAs.

''It (study) has also failed to address the impacts of FTAs on revenue and domestic industries,'' Dr Mostafa Abid Khan of Bangladesh Tariff Commission said.

He also wanted to see whether Bangladesh would be able to provide its Small and Medium Enterprises (SMEs) sector with huge fund support like that of India to make them competitive as the study found.

The conference was attended by local and international economists, academicians, trade experts, trade body leaders and diplomats.

India and Pakistan had separately proposed Bangladesh to have the FTAs for mutual benefits of the countries. But Bangladesh has, so far, not given any response to the proposals.

The Ministry of Commerce in Bangladesh co-ordinated the study by private consulting firms from both home and abroad, aiming to have a decision in this regard.

The trade experts were apparently in favour of the FTAs, but expressed doubt on their prospects, particularly to the non-tariff barriers (NTBs) by India and the experience of SAPTA and the SAFTA, which yielded no tangible results.

Referring to NTBs, Prof Abu Ahmed of Dhaka University stressed the need for taking initiatives by the Indian side to remove the bottlenecks if they really want to have FTAs with Bangladesh.

''I think we're ready to accept it (FTA),'' he said emphasising that Bangladesh should go for FTAs, or else, the country would be lagging behind.

Former Commerce Secretary Sohel Ahmed pointed out that Bangladesh has developed its Banglabandha land customs station (LCS) to facilitate trade, but India has done nothing in Fulbari on the other side of Banglabandha.

He urged the concerned parties to consider the ''virtually dysfunctional'' Banglabandha LCS while taking up the case of FTAs.

Economic Minister at the High Commission of India in Bangladesh T N Srivastava, however, said there are many institutional arrangements already set up to deal with the issues and things were progressing now.

Commercial Counsellor in the Pakistan High Commission in Bangladesh Rubina Shah, on the other hand, invited Bangladesh to inform them about any NTBs, other than drug licensing, so that they could solve the problems.

CPD Research Director Dr Mustafizur Rahman suggested identifying products to be able to compete in the markets of India and Pakistan before considering the free trade agreements.

''The market is already indicating that we've comparative advantage,'' he said.

He, however, stressed the need for addressing the NTBs by dividing them into categories as well as strengthening supply side capacities.

About the prospect of FTAs, he questioned the prospect of SAFTA as it has got a long negative list of products. The trade expert also suggested not to see the Indian market as a single entity but to consider it state-wise for selecting products of Bangladesh's export interest.

UNI XC PKS GC0919