Bangladesh Makes Formal Application To Join Eurasian Economic Union
Bangladesh is a member of SAARC and BIMSTEC Trade Blocs and offers significant opportunities for Russian and EAEU investors
Bangladesh has formally proposed to the Eurasian Economic Union (EAEU) to strike free-trade agreement (FTA), as the country prepares for a socioeconomic status change. The proposal was made last week on the back of a visit by the Eurasian Economic Commission (EEC), the financial and regulatory arm of the EAEU so that it could seek concurrence of its member-states: Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
These five countries have over US$1.5 billion annual bilateral trade with Bangladesh, which Bangladeshi commerce ministry officials think can increase manifold if a free-trade pact is inked.
The officials concerned say Bangladesh and the EAEU signed a memorandum of cooperation in Moscow in May 2019 aiming to take forward bilateral trade. Later, a working group was formed to enhance trade and economic cooperation in 19 sectors.
The first meeting of the working group was held in November last in Moscow, with the Bangladesh side led by commerce ministry additional secretary Noor Md Mahbubul Haq while the EEC side headed by its board member Sergey Glaziev.
In the meeting the Bangladesh side had expressed interest in concluding an FTA with the EAEU and the EEC suggested sending a formal proposal in this regard. A senior commerce ministry official stated that Eurasia is a growing market for Bangladesh, while bilateral trade is increasing substantially.
He said the 19 sectors identified in the memorandum of cooperation would not be focused on at this time, and that Bangladesh has prioritized trade in goods, services, energy, and investment
“Our main target is Russian market,” he says, adding that since Russia would not be able to sign any deal unilaterally, “we have to go through EAEU to get any facility there.”
Bangladesh has already conducted a feasibility study and found that signing FTA with EAEU may yield positive results. After getting EEC’s consent we will form a negotiation team and start formal talks a Bangladesh official stated.
In the fiscal year 2019-20 Bangladesh exported goods worth US$398 million to EAEU member states while imports amounted to US$1.106 billion.
Ahead of its formal graduation from the least-developed country (LDC) status in 2026, Bangladesh has intensified its efforts to enter into FTA and Preferential Trade Agreement (PTA) deals with potential trade partners to make up for eventual GSP losses in the West after it graduates into a developing country status and gives up many of its subsidies.
Bangladesh signed first bilateral PTA with Bhutan in December 2020 and is advancing FTA talks with several countries including India, Indonesia, Malaysia, and Sri Lanka.
For Russian and other EAEU businesses and investors, Bangladesh is a member of the SAARC trade bloc which includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Having an FTA with Bangladesh can potentially open these markets should a sourcing or manufacturing plant be established in Bangladesh. Attention to detail needs to be paid to the SAARC regulatory aspect and specifically concerning Rules of Origin, however this is an issue we previously discussed here.
Then there is The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which includes Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand. (Thailand has an FTA with India and coordinates maritime and port connections and developments).
These are valuable: SAARC has a GDP of US$3.67 trillion and 21% of the global population. BIMSTEC has a GDP of US$2.7 trillion and a population of about 22% of the global total.
Russia and EAEU businesses wishing to examine the trade potential of the proposed Bangladesh-EAEU FTA and the potential within SAARC and BIMSTEC may contact us at email@example.com
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