Professional Documents
Culture Documents
Saifuzzaman Chowdhury
President
Chittagong Chamber of Commerce & Industry
Multilateral, plurilateral or regional arrangements and cooperation can yield best result in this regard. But very often, regard. negotiations on multilateral, plurilateral or regional basis are of complexed nature and time consuming. It requires consuming. harmonization of lot of divergent and conflicting interests and synthesizing of varying demands of many countries, which are very difficult to address. On the other hand, negotiation between address. two countries and accommodating each others different interests is much more easy to handle. As a result, both the handle. country can early harvest their economic complementarities and competitive advantages for their shared gains and benefits. This benefits. very prospect of reaping early benefits and possibility of exploiting collective potentialities, is now encouraging many countries to enter into bilateral pact or understanding even within a regional arrangement. The is why Trade Agreement at arrangement. bilateral level, is on surge, in recent time, in international arena. arena. The phenomenon also postulates the efficacy of pursuing enhanced bilateral trade cooperation between Bangladesh & Pakistan even under the ambit of SAFTA for the mutual interests. interests.
Comparative Intra-Regional Merchandise trade: Intra1996 (%) EU (25) 25) NAFTA ASEAN MERCOSER Adden Country SAPTA/SAFTA 43 22 22 8 <5 2000 (%) 66 46 23 21 8 <5 2002 (%) 67 46 23 14 11 <5 2004 2006 (%) (%) 67 43 24 15 9 <5 66 42 24 16 9 <5
Contd..P/2
The above table delineates that SAARC as a regional arrangement has never been able to exploit its prospects and potentials as it was expected for. Since its inception for. intra SAARC trade was below 5% which is one of the lowest in the world as a regional pact. Myriad of reasons pact. may be attributed towards the under exploitation of our regional potentials, but each and every family member of SAARC should now be very active to pursue all means and ways to realize its collective potentials. Hence, it is very potentials. high time that these two regional brotherly countriescountriesBangladesh and Pakistan should come up fast to tighten their hands to consolidate further their mutual and equitable growth and development prospects under the spirit of SAARC and SAFTA. SAFTA.
Cultural homogeneity and mutual acquaintance Same historical tradition Economic complementarities Huge market of about 300 million people Almost similar social structure and family bondage Homogenous consumer behaviour and buying pattern Existence of similar distribution system and selling strategy Almost symmetric economic development state Similarity in life style and standard of living Scopes to exploit each others competitive advantages
Greater market access of each others products Attainment of more economies of scale More FDI attraction in both the countries Promotion of bilateral investment Facilitation of joint venture as well as technology transfer Greater consumer satisfaction with low price index Better exploitation of each others economic complementarities Infusion of dynamism and impetus to holistic economic development effort
Export to Import from Trade Balance Pakistan Pakistan 32.08 28.60 31.50 45.11 63.12 57.74 61.06 95.22 67.32 68.68 112.70 138.92 150.11 181.40 (-) 63.14 (-) 38.72 (-) 37.18 (-) 67.59 (-) 75.80 (-) 92.37 (-)120.34
Salient Features of the proposed FTA: If bilateral trade between Bangladesh and Pakistan is to increase to 1 billion dollar mark, an FTA agreement should be signed. The FTA should have signed. following features: features: Early Harvest Approach: The two countries can Approach: implement an Early Harvest Programme to deliver benefits to their private sector ahead of FTA as well as to provide impetus for an early conclusion of FTA negotiation. negotiation. Under this programme Pakistan should grant immediate duty free access to 73 Bangladeshi products under 9 categories as requested for. for. Pakistan can also provide a list of products under this programme. programme. Contd..P/2 Contd..P/2
Recognition of Special and Deferential Treatment for Bangladesh: Bangladesh: Pakistan should recognize the LDC status of Bangladesh and provide the Special and Deferential (S&D) Treatment to it. As an LDC, Bangladesh is the legitimate it. claimer of the facility. facility. Tariff reduction schedule: Under SAFTA Agreement, Pakistan schedule: is to reduce their tariff to 0-5% for Bangladeshi products within 3 years beginning from the date of coming into the force of the Agreement. Under the bilateral FTA, Pakistan Agreement. should reduce its tariff to 0-5% for Bangladesh with effect from coming into force of this bilateral FTA Agreement. On Agreement. the other hand, as an LDC, Bangladesh should be allowed to comply with its obligations as it is under SAFTA. SAFTA. Sensitive List: FTA should be more liberal than SAFTA. As an List: SAFTA. LDC, any item having export interest of Bangladesh, should be excluded from the sensitive list. At the same time, it should list. be allowed to maintain a wider negative list. Any products list. already under preferential treatment should not be included in the sensitive or negative list. list. Contd..P/3 Contd..P/3
Rules of Origin: Rules of Origin under the proposed FTA, Origin: should be more flexible than that of SAFTA. It should be SAFTA. based on simple value addition criteria and not on Heading or SubSub-Heading change criteria or combination of both of them. them. For getting preferential access to Pakistan market, value addition for Bangladeshi products should be less than or equal to 25% as the percentage is 30% in SAFTA. A derogation in 25% 30% SAFTA. value addition criteria for RMG and other labour incentive goods of Bangladesh should be allowed and it would not be more than 20%. 20% Recognition of Testing Institutes and Laboratories for Conformity Assessment: Conformity assessment certificates Assessment: on technical regulations and product standards, to be issued by the respective designated national agencies, should be accepted until mutual recognition Agreement is reached between the two countries. Non-acceptability of conformity countries. Nonassessment certificates of any product, if and when arise, should be resolved by mutual cooperation and discussion Contd..P/4 Contd..P/4 without restricting the flow of trade. trade.
Imposition of Restrictive Measures: Exports from Measures: Bangladesh should be exempted from antidumping, countervailing and safeguard measures on non-reciprocal nonbasis until Bangladeshs export share reaches more than 10% 10% and the combined LDC share reaches more than 25% 25% of total market share of Pakistan for that particular product. product. Settlement of Disputes: All disputes relating to any Disputes: transaction should be referred for settlement to an arbitration body to be mutually agreed upon by both the countries, unless both parties agree to settle the dispute in any other peaceful manner. manner. Negotiations on trade in services and investment: Trade investment: in Services and investments should be expedited by negotiations between the two countries on the basis of respective offers and requests on preferential basis taking into cognizance of the varying development state of both the countries. countries.
Areas for joint efforts to reap benefits of bilateral Trade Opportunities Cooperation:
Harmonization of H.S. Codes of both the countries. countries. Simplification and harmonization of customs procedure. procedure. Mutual recognition of certifying and testing institutes. institutes. Establishment of direct shipping and air links Establishment of an active network of Government and private sector agencies related to trade and economy. economy. Fostering frequent interaction and building rapport between the businessmen of both the countries. countries. Making the Government functionaries responsive to the needs and problems of the private sector of both the countries. countries. Regular exchange of information on bilateral trade, commerce and investment
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