The Bilateral Free Trade Agreement between the two countries will be Bangladesh’s first FTA. Many are looking at this agreement as a litmus test. Can a FTA between two relatively small developing economies significantly boost bilateral trade?
The agreement which is to be inked this year was discussed during President Maithripala Sirisena’s visit to Dhaka last week (July 2017).
STATS and status quo:
Currently, bilateral trade between the two countries is relatively small– around $100 million with the trade balance tilted towards Sri Lanka. The two countries are also members of three regional trade agreements.
Bangladesh Commerce Minister Tofail Ahmed confirmed that this deal would be signed this year and its aimed at increasing trade flows between the two countries.
The deal can overcome the tariff and non-tariff obstructions to mutual trade. “Bilateral trade relationships must be nurtured amid global changes in trade ties,” Bangladesh’s Foreign Secretary Mohmmad Shahidul Haque said.