Dhaka, Beijing to hold first meeting next month

FT ONLINE

The first meeting to determine the feasibility of a bilateral free trade area (FTA) agreement with China will be held next month, officials said.

The meeting was deferred twice in the last six months.

A six-member Bangladesh delegation will sit with Chinese officials during June 20-21 in Beijing.

Additional Secretary of the Ministry of Commerce Shafiqul Islam will lead the Bangladesh delegation.

The first meeting will discuss the terms of references (ToRs) and the structure of the report of the joint-feasibility study, a senior commerce ministry, official said.

China had shown interest to host the first meeting.

The meeting was scheduled for December last year and later in January this year in Beijing.

However, the meeting could not be held since the high-ups at the commerce ministry showed less interest in such talks.

Bangladesh and China inked a memorandum of understanding (MoU) for conducting a joint-feasibility study on signing an FTA deal.

The MoU was signed in October 2016 when Chinese President Xi Jinping visited Dhaka.

A month before the signing of the MoU, China in a letter proposed conducting the study to examine whether a free trade area could be established.

China also expressed its willingness to provide necessary funds to conduct the study.

Data shows Bangladesh's import from China is worth US$ 9.0 billion, while exports to the country are only around $ 800 million.

However, due to large trade imbalance between the two countries, local businesses and economists oppose signing of an FTA deal with China.

According to officials, Bangladesh earns over $ 2.70 billion as revenue from the volume of goods imported from China.

If duty-free market access is granted to Chinese products, Bangladesh will lose such a big amount as revenue, they fear.

They said China has granted duty-free market access to 4,886 products from the least developed countries (LDCs) to its market.

Bangladesh also enjoys the facility as an LDC.

Almost a similar number of Bangladeshi products also enjoy duty-free access to the Chinese market under Asia Pacific Trade Agreement (APTA) since 2010, according to officials.

Besides, Bangladesh has decided to sign a 'letter of exchange' with China to get duty-free and quota-free access of its 97 per cent products to the East Asian market including major exportables.

Trade officials said the signing of the 'letter of exchange' may take place anytime soon.

Trade officials fear that Bangladesh's local industry might be hit hard if the FTA agreement was signed with a country like China.

China can produce goods at a competitive price.

They said the interest of exporters, importers, the domestic industry, and consumers have to be kept in mind before signing any preferential deal with any country.

The country's trade body leaders are also opposed to the signing of such deals with countries like China and Malaysia.