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Bangladesh & Sri-Lanka deplore state of preferential trade within SAARC
February 13, 2001
Dhaka--(Bangla2000) – Deploring “unfortunate state” of preferential trading arrangements under SAARC, businesspeople and government leaders of two member-countries of the forum yesterday agreed that they should go for bilateral cooperation to enhance trade.
As Industries Minister Tofail Ahmed suggested bilateral option in view of a slowdown in SAARC affairs, Bangladesh’s top business leader urged businessmen of the regional forum countries to fortify their position as an economic power bloc to sustain global competition.
Managed trade by powerful blocs would swamp developing countries, business leaders were warned in a Bangladesh-Lanka meeting, suggesting bilateral approach first to propel multilateral effort in enriching respective economies.
“We don’t need to forget about multilateral approach…bilateral approach can be a complement to propel multilateral ones,” said Prof GL Peiris, leader of a visiting Sri Lankan delegation.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) hosted the meeting between its members and the Sri Lankan delegation, including 18 young entrepreneurs, in the FBCCI conference room.
Yussuf Abdullah Harun, president of the country’s apex trade body FBCCI, chaired the meeting, also addressed by his vice president Mohammad Ali.
Prof GL Peiris, Lanka’s Minister for Constitutional Affairs and Industrial Development and Deputy Minister for Finance, said bilateral cooperation in trade and economy could propel and enrich the Bangla-Lanka economies, like Lanka-India free trade agreement.
“All the ingredients are in place. Now the need is to take the leadership,” he told the meeting to point out the common values of political institutions in the two countries.
“It’s not difficult to do…there is already a strong foundation to build and consolidate economic development of both the countries,” he said and indicated pulling out own resources to add value through infusing experience and technology of each other.
The Sri Lankan Minister named tourism, apparel and capital market as sectors of cooperation. He said both the countries have much to offer in tourism sector and come closer to enrich the economies.
About cooperation in apparel business, he said his country imported RMG raw materials worth USD1150 million last year, and only 5 per cent of the imports came from the subcontinent. “If we import this raw material from Bangladesh, both the countries will be benefited.”
He also identified stock exchanges for a promising cooperation sector.
Industries Minister Tofail said both Bangladesh and Sri Lanka are members of SAARC under which SAPTA was introduced to support weaker economies and increase trade shares among the members. “Unfortunately, we did not get such benefit.”
He said the concept of ASEAN and other trade and economic cooperation blocs is to compensate each other. “We could not reach that situation…virtually the position remained same.”
Tofail regretted though Bangladesh made a drastic tariff cuts from 350 per cent to 37.5 per cent to liberalise its economy, many countries did not reciprocated. “They, including India, rather imposed non-tariff barriers like countervailing duty,” he told the meeting.
“Bangladesh-Sri Lanka should work together in this regard,” he said and sought Sri Lankan support in the next WTO ministerial talks late this year where LDC leader Bangladesh would demand duty-free market access for LDC products.
The minister highlighted the indicators of economic progress in the country and invited Lanka’s entrepreneurs to invest here for enjoying rewarding incentive packages offered for investors.
Sri Lanka can cooperate with Bangladesh in agro-based industries and RMG backward-linkage industries, he said.
FBCCI president Harun suggested promoting both bilateral and regional economic cooperation as he said greater interaction on both the planes is more intensely felt yesterday due to, more or less, identical economic and trade policies of free market economy being pursued by developed countries.
“We are now beset with an environment where free trade is endangered by managed trade,” he said, “powerful trade blocs like NAFTA, EU, APEC, etc. have emerged marginalizing the developing countries.”
Under this changed global environment, he said, “We should not only attempt at enhancing bilateral cooperation but also promote regional cooperation among the South Asian countries.”
Unless the countries in the SAARC region strengthen cooperation and fortify their position as an economic power bloc, there is every possibility of being swamped by other powerful blocs in world trade and economy.
He said WTO entails a complex rule-based trade regime. Countries who do not have requisite negotiation strength are likely to be at serious disadvantage at all WTO Forums.
Bangladesh and Sri Lanka have been partners in trade for a long time, though the volume of trade does not figure significantly.
The high recorded exports from Bangladesh were worth US$10 million in 1990-91 but it decreased to US $5 million in 1999-2000, whereas Sri Lanka’s highest recorded exports to Bangladesh stood at US $12 million in 1996-97 but declined to US $8 million in 1999-2000.
“We urgently feel the need for diversifying and raising the volume of trade faster for which, we believe, there are ample opportunities,” said the FBCCI president.
He suggested introduction of single-country trade fair in both countries and direct transportation. At present there is no shipping service between Bangladeshi seaports and Colombo.
Businessmen on both sides also inquired about possible areas of cooperation in the one-to-one meet following the formal meeting.