Al Amin :
Economists and businesses of Bangladesh worried over the formation of the Regional Comprehensive Economic Partnership (RCEP), a largest economic bloc as the country is going to face new economic challenges for it.
They suggested the Bangladesh government for taking comprehensive strategies to face the challenges.
The 15 Asia-Pacific economies in the RCEP, signed recently on the sidelines of a summit of the Association of Southeast Asian Nations (ASEAN), include the 10 members of ASEAN plus Japan, South Korea, Australia and New Zealand.
It aims in coming years to progressively lower tariffs across many areas, address tensions in the South China Sea and tackle plans for a post-pandemic economic recovery in a region where US-China rivalry has been rising.
The RCEP will account for 30 percent of the global economy and 30 percent of the global population. It is expected to reach 2.2 billion consumers. The new free trade zone will be bigger than both the US-Mexico-Canada Agreement and the European Union.
Ahsan H Mansur, Executive Director of Policy Research Institute, told The New Nation, “The formation of trade bloc will not impact on our country’s economy immediately but after the graduation from LDC in 2024, our export earnings may hamper massively if we fail to take proper initiatives in this regard.”
“Bangladesh will lose the duty-free access to the member countries, especially Japan, China and South Korea after attaining developing country status in 2024. On the other hand, our competitors Myanmar, Cambodia and Vietnam will still have the zero-duty facilities because they are members of the new bloc,” he said.
“The trade bloc will also affect our Foreign Direct Investment (FDI) vastly as the competitors of Bangladesh in the RECP will become more attractive destinations for foreign investors,” he added.
Facing the circumstance, the Bangladesh government must take measures to increase export to the member countries of the RECP, he opined.
“We have to reduce dependency on WTO as it will not be able to play role in global trade in future,” he added.
Facing the new challenges for the country in coming days, Dr Khondaker Golam Moazzem, Research Director of CPD, suggested that Bangladesh government to prioritise trade pact between the countries in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation or BIMSTEC.
It can enter the markets of Myanmar and Thailand through the pact, but it will be a short-term solution, he said.
In the long term strategies for the country, Bangladesh should increase economic partnership (FTA, CEPA and RPA) with different countries, especially will Vietnam Japan and Korea, he suggested.
Bangladesh will have to focus more on increasing the specialized and integrated products by reducing production cost anyhow, he added.
Mohammad Hatem, Vice-President of BKMEA, said, “RMG sector, the main export earning source of the Bangladesh, will definitely go on back foot, especially after 2024 as our main competing countries will be the most beneficiary of the bloc.”
There are many reasons to be worried as Vietnam, one of the biggest competitors of Bangladesh in the RMG sector, and other ASEAN countries will get trade facilities in China, Japan and Korea, he added.
Overcoming the situation, the Commerce Ministry will have to take measures immediately, he added.
