Barriers to intra-regional trade in South Asia
The focus area of the present government of Bangladesh is to provide employment to the vast population of the nation by expansion of trade and commerce,” revealed moderator of the session, Shubhashish Bose, Secretary, Ministry of Commerce, Government of the People’s Republic of Bangladesh. The country has ambitious plans to join the league of middle income countries by 2021. The government’s vision is for inclusive welfare, to prosper along with other nations in the region. To fulfil this vision Bangladesh is being developed as the economic hub for all countries in the region. Incentives are being offered to increase exports, expand exports basket and target markets are being diversified. Bilateral agreements have been signed with 44 countries to reduce tariff and non-tariff barriers.
To expand trade and reduce trade deficit Preferential Trade Agreements have been signed and duty free benefits have been achieved in exports to EU, Japan, Canada, China, Malaysia, S.korea, S.africa and Brazil. Even though SAFTA has been signed with South Asian countries but the agreement is not performing as per expectations. Thus, the session rightly focused on barriers to intra-regional trade and solutions.
Sailesh Garg, General Manager and MD, Drewry Maritime Services Pvt Ltd, India discussed the key trends and issues in trade among
South Asian countries with more focus on Bangladesh. The outlook for global economy is good and looks robust for the next five years. South Asia will be the growth driver, but there are certain risk aspects as well such as high oil prices and trade restrictions. Trade wars at the global level can create favourable conditions for South Asia countries to better integrate and increase trade. South Asia accounts for just 4 per cent of global GDP, accounting for less than 20 per cent of world export and import.
Coming to India, the economy is expected to remain stable and grow in the next five years. GST has brought down time and cost of logistics to a great extent. Cabotage relaxation will promote transhipment in India, about 47000 teus of transhipment containers have been handled so far. With the signing of treaties Bangladesh has emerged as the biggest trade partner for India in ASEAN. In the next 30 years Bangladesh will emerge as a developed economy and to support this growth port and logistics infrastructure will need capacity addition. As roads alone cannot take the increase in cargo movement, so rail and inland waterways will play a major role in future logistics. Private participation can help in improving infrastructure by framing favourable policies.
“World Bank report reveals that intraregional trade accounts for 50 per cent of trade in Asia Pacific, 20 per cent in Africa and just 5 per cent in South Asia. The reason is tariff, non-tariff and para-tariff barriers,”
Bureaucrats and stakeholders from the maritime fraternity identified lack of trust and tariff and non-tariff barriers severely hindering the trade growth in the region
(L to R) Sailesh Garg, General Manager and MD, Drewry Maritime Services; Tarafder M Ruhul Amin, MD, SAIF Powertech, Bangladesh;Shubhashish Bose, Secretary, Ministry of Commerce, Government of the People’s Republic of Bangladesh; Md. Nojibur Rahman, Principal Secretary, Government of the People’s Republic of Bangladesh; Shantanu Bhadkamkar, Chairman ATC Group; Khandaker R Zaman, MD, Allseas Bangladesh; Nandan Yalgi, Managing Director, Boxco Logistics