Bangladesh to give duty free access to 16 more products
Bhutan and Bangladesh have finalised the draft terms and conditions for signing a preferential trade agreement (PTA) that is expected to increase trade between the two countries.
Bangladesh already gives duty-free access to 18 products, including boulders, oranges and apples. The signing of the agreement will give duty-free access to 16 more products from Bhutan.
Under the agreement, Bhutan will provide duty-free access to 100 Bangladeshi goods, including garments, processed agricultural goods and electronics.
Trade between the two countries operates under the Bilateral Trade Agreement signed in 1980. The PTA will serve as a formal legal document on trade between the two countries, according to the economic affairs minister.
Economic Affairs Minister Loknath Sharma said that the PTA would make Bhutanese goods competitive in the Bangladesh market due to the duty benefits.
The products from Bhutan that will be given duty-free access include milk, natural honey, wheat, jams, fruit jellies, marmalades, and mineral water and carbonated water.
Other Bhutanese goods that will be eligible for preferential treatment in the Bangladesh market are wheat bran, quartzite, cement clinkers, portland cement, soap, wooden particle boards, ferrosilicon, iron bars and rods or non-alloy steel and wooden furniture among other products.
Lyonpo Loknath Sharma said that the two countries have agreed to a draft text of the agreement, which will soon be given a final shape by a commerce secretary-level meeting. The two countries’ economic affairs/commerce ministers are expected to sign the PTA in the near future.
Although Bhutan will give duty-free access to more goods to Bangladesh than otherwise, the economic affairs minister said that that would not impact the trade balance which today is in Bhutan’s favour mainly due the export of boulders and minerals.
In 2019, Bhutan imported goods worth Nu 625 million from Bangladesh but exported goods worth more than Nu 6 billion to Bangladesh. Bhutan’s exports today are mainly agricultural and mineral products.
The PTA is expected to benefit Bhutan more as the number of duty-free goods to Bangladesh will almost double. The economic affairs minister also said that Bhutan could benefit immensely given the huge market in Bangladesh.
“Our industries are expected to increase their production level with the signing of the preferential trade agreement with Bangladesh,” he said.
Bangladesh has agreed to allow Bhutan to use Chittagong and Mongla ports for export and import of goods.
This, the minister believes, will make the export of Bhutanese goods beyond the neighbouring countries easier. “We are hoping that we will be able to make use of the sea ports once we sign the agreement,” he said.
“The agreement will help us enhance our trade. It also helps us in strengthening relations with our trading partners,” Lyonpo Loknath Sharma said.