The effects of the RCEP agreement may decline after Bangladesh loses its duty-free export facility when it graduates from a least developed country to a developing one.
- $950 million derived to Bangladesh from RCEP-listed countries in FY2019-20.
- Bangladesh receives about one-third of its FDI from RCEP member countries every year.
- The impacts of the RCEP agreement may deteriorate after Bangladesh loses its duty-free export facility when it advances from a least developed country to a developing one.
- Bangladesh’s Delegation in Beijing has called for reinforcing trade relations with RCEP members, the European Union and the US, before the advancement by signing free trade agreements and bilateral or multilateral agreements
Vietnam’s inclusion in the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade bloc, will harm Bangladesh’s exports.
Moreover, foreign direct investment (FDI) in Bangladesh from the major Asian economies included in the contract may decline, fears the Bangladesh delegation in Beijing.
The effects of this contract may deteriorate after Bangladesh loses its duty-free export facility when it rises from a least developed country (LDC) to a developing one.
So, the delegation instructed the authorities concerned to sign free trade agreements (FTAs) with the European Union and the US, before the advancement.
The delegation also opined in favour of reinforcing trade relations with RCEP members, including China, by signing FTAs or bilateral or multilateral agreements.
In a statement sent to the commerce ministry on 2 December this year, Mohammad Monsour Uddin, commercial counsellor at the Bangladesh Embassy in Beijing, said, “RCEP will not only increase trade and liberalise tariffs among its members but also create a favourable environment for investment and development value chains and production networks.”
“So, countries like China, Japan and South Korea will be motivated to invest in RCEP member countries due to the special market access and the mutual standards offered by RCEP. This would create some challenges for Bangladesh to fascinate FDI from these countries,” he added.
According to the Bangladesh Bank, FDI of $3,232 million came to Bangladesh in the fiscal year 2019-20. Of this sum, $950 million came from RCEP-listed countries like Singapore, China, Japan, South Korea, Thailand, and Malaysia. Results, Bangladesh receives around one-third of its FDI from RCEP member countries every year.
On 15 November, 15 countries – including Australia, New Zealand and 10 members of the Association of Southeast Asian Nations (ASEAN) – inked the RCEP deal, which covers 2.2 billion people with a combined GDP of $26.2 trillion.
Meanwhile, a board set up by the commerce ministry to review RCEP’s impact and assess Bangladesh’s inclusion in the multilateral agreement will see for the first time on Monday.
Shahidul Islam, head of the board and additional secretary to the ministry, told us that the committee would find the scope of work at the meeting. Later, the board will prepare a report with recommendations after meeting the stakeholders.
Dr Mostafa Abid, a member of the committee and Bangladesh Trade and Tariff Commission, told TBS, “There is a concern that the RCEP may affect our exports and FDI. After our advancement from LDC, exports may suffer more.”
“An inclusive study is required to review the impact of the RCEP. The board will meet with the public and private sectors and make endorsements to the government on their views,” he continued.
“Bangladesh now has no access to join the RECP in the next 18 months, even if it wants to be involved in it. So, we have to take full preparation at this time. To be included in the RCEP, we need to make major changes to our trade policy,” Dr Abid added.
The delegation report also said, “Unlike from Vietnam – who has contracted various Regional Trade Agreements such as RCEP, the Trans-Pacific Partnership and The Comprehensive and Progressive Agreement for Trans-Pacific Partnership – Bangladesh, advancement to LDC, is not guaranteed free trade access to these markets.”
To get more business news visit businessstar24.com
To get involved: Bangladesh Economic Forum
This Forum is for the community of the country’s Business & Economic News. This community started its journey in 2020. Ever since then, it has been the sole source for news and updates regarding finance and economics. This community aims to educate society on how the developments can shape their lives and how they should prepare themselves to participate in this economy. It shares news and in-depth reviews on the latest happenings around Bangladesh.
About Zulker Naeen
- Cutting trees and public consultations in Kenya during COVID-19
- When a ‘Climate Emergency’ is not enough
- Regional Energy Trends: A comparison of the five countries analysed
- Future of Venice lies among the fragile habitats of its Lagoon, threatened by man and climate change.
- Egypt’s air pollution is making my daughter sick
To Read, Japan’s threatened fields of green.
Tea farmers in the Asian country have long enjoyed a very stable and predictable climate, but as global warming and Covid-19 upends that equilibrium, they respond with new ways to farm and sell their products.
If you have any questions, comments or want to get involved, email Zulker Naeen at email@example.com – that’s me. I’d love to hear from you. And if you’ve been forwarded this email and liked what you saw, why not subscribe?