TRADE WITH BANGLADESH
Joint-Economic Council to consider free-trade agreement
By AMANULLAH BASHAR
Aug 05 - 11, 2002
The Joint-Economic Council (JEC) of Pakistan and Bangladesh will soon be meeting in Dhaka to explore the possibilities of allowing free-trade between the two countries provided it is in conformity of the WTO provisions.
The meeting of the JEC on the desire of the heads of the two countries will also be looking into setting up of the joint ventures for which areas have already been identified.
Basis for free trade agreement between Pakistan and Sri Lanka have already been provided with the signing of MoU agreement in the wake of President Musharraf's visit to these countries.
The free-trade facility will be highly beneficial to all the signatories of this agreement, however since Pakistan has a much broader export surplus base as compared to Bangladesh and Sri Lanka the balance of trade would naturally be tilting in favour of Pakistan.
BALANCE OF TRADE
Pak Export to BD
Imports from BD
It may be recalled that in the 7th session of Pak-BD JEC in May 1998, the two sides held discussions on the possibility of entering into joint ventures and agreed that the fields of textile goods, transport equipment, specially three wheeler vehicles and small 10-20 mw hydel power plants provided the basic potential in this regard.
Besides agreements signed between the two countries in the past, Pakistan and Bangladesh have signed two more agreements regarding cultural and technology exchange agreements to further the existing relations between the two brotherly countries.
The agreement was the outcome of President Pervez Musharraf's visit to Bangladesh last week after detail discussion on bilateral, regional and international issues.
The visit of the President proved fruitful particularly for growth of trade volume as the two sides focused on trade and economic relations and greater market access of Bangladesh goods to the Pakistani market.
Pakistan also agreed to provide tariff and duty free import of raw jute from Bangladesh. Pakistan also agreed to provide similar concession to import of tea from Bangladesh up to 10,000 tons per year provided the WTO provisions permit it.
Bangladesh have expressed its desire to expand the list of items to be allowed duty-free entry into Pakistan. It was also decided that the existing Pakistan-Bangladesh Joint Economic Council would meet at least once a year to discuss further trade expansion between the two countries.
Pakistan and Bangladesh both are members of OIC, D-8, Non-Aligned Movement, the Commonwealth of Nations and SAARC.
Pakistan is enjoying favourable trade balance with Bangladesh. The exports to Bangladesh have been gradually increasing since 1996-97. Pakistan's exports increased from $87 million in 1996-97 to $133.8 million 2000-2001, whereas imports from Bangladesh decreased from $38.4 million in 1996-97 to $33.3 million in 2000-2001.
MAJOR ITEMS OF EXPORTS
Pakistan exports textile yarn and fabrics, cotton American, rice, polyvinyl chloride, vegetable and fruits, petroleum products, pharmaceutical products, articles of apparel and cloth accessories. While Pakistan imports jute raw, tea, sacks and bags of jute, betel leaves etc from Bangladesh.
There is an ample scope for expansion of bilateral trade between the two countries. Pakistan can not only export textile yarn, raw cotton and rice but cement, food products, engineering goods and machinery and on the other hand Pakistan can import fish, vegetables like ginger, fruits, Bamboo, paper, pulp and betel-nuts besides jute and tea. Pakistan already depend on Bangladesh for most of the supply of raw jute for manufacturing of jute goods.
The two countries are in agreement that both of them should import from each other rather than buying from distant countries. Pakistan and Bangladesh can approach the Islamic Development Bank to provide trade-financing facilities to help promote trade among them.
There is a vast scope for joint ventures between the two countries especially in the field of textile, leather, chemicals, fertilizer and engineering goods.
The textile sector of Bangladesh is fully equipped with the latest facilities of printing, dyeing and stitching. Pakistan's textile sector should strike at the opportunity for more value addition. Bangladesh have abundant orders regarding export of readymade garments to Europe and other world markets. Pakistani business may enhance the export of readymade garments by having collaboration with Bangladeshi exporters. A new era of economic prosperity may knock at the door if the countries in the region join hands to work together in the larger interest of the respective countries and the people.