Calls for product diversification to expand trade ties with Asean

Bangladesh has great potential to enter the Asean market using an export-oriented manufacturing strategy and diversifying its products, speakers said at a webinar on Sunday.

They recommended dealing with technical and non-tariff barriers that could increase the country's export volume to $1.2 billion from the present $60 million within the next four years.   

The suggestion came at the virtual discussion organised by the Ministry of Foreign Affairs, read a press release.  

Chaired by Foreign Secretary Masud Bin Momen, the webinar was attended by: Bangladesh ambassadors and high commissioners posted to South East Asian countries, different chambers of commerce that have business interests in Asean countries, representatives of various exporters' associations, and high officials of the Ministry of Foreign Affairs, the Ministry of Commerce and the Bangladesh Trade and Tariff Commission. 

Prof Selim Raihan, Department of Economics, University of Dhaka, presented the keynote paper on "Expanding Bangladesh's Business Ties with Asean Countries." 

In his opening remarks, the foreign secretary said historically and traditionally, Bangladesh has had very close commercial and cultural links to South East Asian countries due to their geographic, as well as strategic, complementarities. 

Masud Bin Momen said in order for Bangladesh to attain the government-set goal of $60 billion export figure by the turn of the year, the performance on the South East Asian front must be much better.

In his keynote paper, Prof Selim pointed out that Bangladesh stands to gain significantly through integration with South East Asian countries. It would allow Bangladesh to focus on the export-oriented manufacturing strategy and encourage export diversification. 

Observing that presently Bangladesh's exports to Asean countries are significantly low, he said product diversification, followed by market and needs assessments in those countries, will help Bangladesh accelerate its desired integration process.

Prof Selim identified a set of five challenges in export diversification. The five are: pro-ready-made garment (RMG) bias in policies and programmes, inadequate policies and strategies hurting non-RMG sectors, weak collective action of non-RMG sectors, an environment with a high cost of doing business disproportionately affecting non-RMG sectors, and low public spending on health and education leading to low productivity and skills development.

In her address, BGMEA president Rubana Huq said by 2030 Asean, as a bloc, will be the fourth largest economy in the world, and to enter that market, Bangladesh should negotiate signing a free trade agreement with the Rules of Origin clause favourable to Asean.

MCCI president Nihad Kabir delivered the closing remarks. 

Supporting the idea of a pro-active trade policy, she stressed the need to carry out an exercise on how competing countries differ from Bangladesh in terms of making rules and executing them.

Additional Secretary (East) Ministry of Foreign Affairs Ambassador Mashfee Binte Shams suggested that the missions in the South East Asian countries forge strategic partnerships with prominent trade bodies and chambers in the host country to organise single country/single product fairs – not only in the capital city but also in the most vibrant commercial cities.

The meeting decided that, from now on, regular consultations will take place between the ministry and the chambers of commerce on trade and investment facilitation issues.

To popularise Bangladeshi drugs in Asean markets, single country product fairs need to be organised frequently and Bangladeshi companies need to set up branches there, said the speakers.