Businesspeople in Bangladesh will face massive difficulties across the globe if they lose priority trade facilities after the transition from the status of the least developed countries (LDCs) in 2026.
The country’s decision to join the Regional Comprehensive Economic Partnership (RCEP) is very positive to hold the export market in the face of potential adverse conditions.
The new alliance is important for Bangladesh considering the size of its economy and the amount of foreign trade. The alliance includes our major importers such as China and Japan as well as competing countries – Cambodia, Indonesia, Myanmar, the Philippines, Thailand, and Vietnam.
If we cannot join the alliance, a significant part of our big markets will be taken over by the entrepreneurs of these competitive countries.
There is no denying that free trade agreements with different countries and regions are needed to sustain business in the international market.
From the experience of Bangladesh’s free trade agreements with Bhutan, Nepal, and Sri Lanka, it can easily be said that such bilateral agreements take a long time. But, alliance-based FTAs save both time and labour.
It is true that joining such an alliance gives some advantages in foreign trade, but at the same time, one has to open up its own market to the countries concerned. It has both advantages and disadvantages.
By joining the RCEP, the competing countries will have the opportunity to export goods to our country duty-free. If we want to survive when the market is open, we need to increase the competitiveness of our entrepreneurs. The cost of production should also be reduced by increasing efficiency.
After joining an alliance like the RCEP, labour productivity will have to be increased in order to capture the domestic market as well as the external market. The use of new technologies must also be ensured. I believe that this alliance will be helpful in the transfer of technology.
But the cost of doing business will become a big issue in the future. In this situation, the government must take responsibility to ensure the Ease of Doing Business.
Our ready-made garment industry has set a good example by surviving the tough global competition. Besides, there are several potential sectors such as light engineering, leather, and medicine. All these possibilities have to be exploited through the diversification of export products.
So far, most of our export earnings have come from a handful of countries. The proposed RCEP will also play a big role in increasing the number of destinations of exports.
But no major study has been done so far on the advantages and disadvantages of joining a large alliance like the RCEP. In order to take advantage of the alliance, its terms and conditions have to be negotiated vigorously. And in all these works, the opinion of the government as well as researchers, private sector entrepreneurs, and all kinds of stakeholders has to be taken.
