Bangladesh wants FTA for apparel trade, Brazil replies positively
Bangladesh Commerce Minister Tofail Ahmed meeting Brazilian Ambassador João Tabajara de Oliveira Júnior at his office. Photo: PID
Bangladesh wants to sign a free trade agreement (FTA) with Brazil in the hopes of increasing its apparel exports to the country – what can provide a window of opportunity to tap into the market of the Latin American countries.
Brazil, in reply, has responded positively.
Commerce Minister Tofail Ahmed made the call to João Tabajara de Oliveira Júnior, the Brazilian ambassador to Bangladesh, while the latter made a courtesy call at the minister’s Secretariat office on October 7, 2018.
After the meeting, Minister Tofail told journalists: “The Brazilian market is a promising export destination for our readymade garments products. However, we are not getting proper access to its market because of the high tariff barrier. This can be resolved by signing an FTA… we can receive duty benefits through this deal.”
Also, Tofail mentioned of Bangladesh’s interest to form a Brazil-Bangladesh Chamber – what he said will give a big boost to the bilateral trade between the two countries. “If the Chamber is formed, businessmen of both countries will be encouraged to engage in bilateral trade and communication.”
Oliveira Júnior expressed that Bangladesh is a friend of Brazil and that trade relations between the two countries go a long way back. “Brazil is interested in expanding bilateral business with Bangladesh. To formalise and institutionalise the business structure, we need to establish a Chamber (with businessmen of both countries) and sign an FTA.”
Among others present during the meeting were Shuvashish Basu, senior commerce secretary of Bangladesh, and his colleague Additional Secretary (TO) Md Obaidul Azam.
Bangladesh’s FTA with Brazil at this time – when a tariff war is prevailing between the US and China – may provide additional benefits. A recent report reflecting on the trend of first half of 2018 says the US is looking to change its sourcing strategy and are now looking for new suppliers in Latin America.
Bangladesh may have the potential to tap into the United States’ “close to home” sourcing strategy, which presumably due to prioritising cost-cutting on logistical costs incurred from overseas sourcing, by posing as a third-party supplier for the US market.
It is to be noted that the US has denied Bangladesh duty-free access to its market. An FTA is not on the agenda either. In a scenario where Bangladesh’s apparel products are among the highest taxed products in the American market, the apparel trade continues with exporters looking for easier means of business.
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