Bangladesh will request Japan to commence a joint feasibility study on the signing of a free trade area (FTA) agreement to help boost bilateral trade, officials said.
The Ministry of Commerce has decided on the joint study recently after examining a draft feasibility study report, prepared by the Bangladesh Trade and Tariff Commission (BTTC).
It also asked the commission to analyse trade data and time series data before finalising the report. The FTA’s impact on next five year’s direct and indirect tax revenue would also be taken into consideration.
Besides, the BTTC was asked to bear in mind the FTA’s possible impact on the country’s economic activities, labour market, employment generation, and industrialisation during the next five years of inking the deal.
Earlier, the commission in its study report said the FTA agreement with Japan will be of immense benefit for Bangladesh, especially in the post-LDC (least developed country) era, when the country will lose various trade concessions.
Presently, all but a few Bangladeshi products enter Japan under duty- and quota-free facility, but it will not last long when Bangladesh will graduate to the status of a developing country. The country is set gain the status in 2024.
BTTC Member (International Cooperation) Dr Mostafa Abid Khan told the FE on Friday that Bangladesh has to sign a FTA with Japan in the form of economic partnership.
He said as per the WTO rules, a developed country, like Japan, can only sign an FTA, not a preferential trade agreement.
Japan mainly signs economic partnership agreement, which covers everything like a comprehensive FTA, he noted.
“I have told the ministry that an FTA can be signed with Japan, provided it is willing to do so,” he added.
Bangladesh imports goods worth some US$1.8 billion from Japan and exports goods worth $1.3 billion to that country, which is over 3.0 per cent of the country’s total global trade.
Bangladesh exports apparel, footwear, gaiters, machinery, nuclear reactors, boilers, leather, animal gut, harness, travel goods, fish, crustaceans, molluscs, aquatics invertebrates, raw hides and skins, wadding, felt, yarns, twine, cordage, and electrical and electronic equipment, among others.
On the other hand, the imports from Japan include automotive vehicles, iron and steel, ships, boats, and other floating structures, electrical and electronic equipment, man-made staple fibres, zinc, manmade filaments, cotton, ores slag, and ash etc.