Bangladesh is interested in signing a Free Trade Agreement (FTA) with the Eurasian Economic Union (EAU), comprising Russia-led Eastern European countries Belarus, Kazakhstan, Armenia, and Kyrgyzstan. The Ministry of Commerce has recently written to the Ministry of Foreign Affairs requesting it to formally propose the Eurasian Economic Commission (EEC) to sign the FTA.
The countries of the EAU, one of the largest economic blocs in the world, had a foreign trade amount worth 7 lacs 31 thousand and 100 crore dollars in 2020. The GDP (gross domestic product) of the countries is 1 thousand and 734 trillion dollars. Bangladesh does not get duty-free facilities in these markets which have huge potential for domestic export products. Although Bangladesh’s exports to these countries have increased over the past decade, they have not yet reached significant levels.
According to the Export Promotion Bureau (EPB), Bangladesh’s exports to the EAU during July-December of the current fiscal year amounted to 38 crores and 20 lac dollars. In the previous fiscal year, Bangladesh’s exports to the region amounted to 67 crores and 70 lac dollars. In the fiscal year 2019-20, Bangladesh exported 49 crores and 80 lac dollars to EAU.
Bangladesh has huge potential for exporting frozen food, knitwear, jute products, and shrimp to the countries of the region. Exports are not growing at the desired level because of the lack of duty-free facilities and the complexity of direct banking transactions with Russia due to US sanctions. That is why Bangladesh Bank has taken initiative to ensure duty-free export facilities and swap currency with the Central Bank of Russia by signing FTA.
Following the signing of the Trade and Investment Framework Agreement (TIFA) with the United States in 2014, Russia also proposed the formation of an intergovernmental commission with Bangladesh to enhance trade, investment, scientific and technical assistance. In 2017, Bangladesh and Russia signed an agreement regarding this.
After LDC graduation, Bangladesh will have to face some challenges. The government is working towards this goal. The government is making efforts to make trade agreements like PTA or FTA to facilitate trade. In the meantime, PTA has been signed with Bhutan. Negotiations are underway to sign trade agreements with several other countries.
