DHAKA, Sept 19, 2018 :Bangladesh has the potential to more than
double its trade with the South Asian countries by reducing manmade trade barriers while the increased regional trade can accelerate the country’s growth and create more jobs for men and women, says a new report of World Bank (WB).
The report, however, says trade within the South Asia can grow three times, from US$ 23 billion to US$ 67 billion, by reducing manmade trade barriers.
The report has documented the gaps between current and potential trade in the South Asia and provided a roadmap for deepening regional trade. It identified four critical barriers to regional trade: tariffs and para tariffs, real and perceived non-tariff barriers, connectivity costs, and a broader trust deficit.
Finance Minister AMA Muhith today unveiled the report on “A Glass Half Full: The Promise of Regional Trade in South Asian” at a city hotel.
WB Country Director for Bangladesh, Bhutan and Nepal Qimiao, Policy Research Institute (PRI) Chairman Zaidi Sattar and Lead Economist and Coordinator of the WB South Asian Regional Integration Sanjay Kathuria, among other, were present on the occasion.
Speaking at the function, Muhith said the government is working sincerely to improve connectivity between Bangladesh and other South Asian countries as it is the main sources of increasing trade among the South Asian nations.
He said regional trade will be increased by removing tariff and non-tariff barriers and the government continues talks with neighbouring countries to pave ways to remove the barriers.
Qimiao Fan said Bangladesh can become an economic powerhouse by deepening regional and global integration in trade, connectivity, energy and investment.
“For increased regional trade, Bangladesh needs to focus on improving its trade policy regime, which currently has a strong anti-export bias,” he said.
Sanjay Kathuria said: “Trust between countries is in short supply in the South Asia. Border haats between Bangladesh and India, aimed at recapturing the once thriving economic and cultural relationships are now changing cross- border relations”.
“Haats are not just about trade. They are about using trade to foster
people-to-people connect and trust. South Asian policymakers can aim to reinforce the virtuous circle between trade and trust – the experience of Bangladesh-India border haats offer several useful insights in this context,” he added.
The report said the costs of trade are much higher within South Asia
compared to other regions since the average tariff in the South Asia is more than double the world average.
The South Asian countries have greater protection for imports from within the region than from the rest of the world. Countries impose high para tariffs, and more than one-third of the intraregional trade falls under sen- sitive lists, comprising goods not included under South Asia Free Trade Area (SAFTA)’s tariff liberalisation.
In the case of Bangladesh, nearly 46 percent of its imports from South Asia fall under sensitive lists.
The countries are yet to reap the benefit of shared land borders. This
arises from deficiencies in border regimes, including limited information flows on nontariff measures, and inadequate use of modern clearance procedures. Limited air connectivity makes regional trade and investment costlier.
The report recommended targeting sensitive lists and para tariffs to
enable real progress on SAFTA and called for a multi-pronged effort towards addressing non-tariff barriers, focusing on information flows, procedures, and infrastructure.
The report also suggested that policymakers draw lessons from the India- Sri Lanka air services liberalisation experience, where liberalisation was gradual and incremental, but policy persistence paid off. Connectivity is another key enabler for robust regional cooperation in the South Asia.