adv-06

ASEAN & Bangladesh relation New trade trajectory

adv-07

AKM Asaduzzaman Patwary

Research Fellow, Head of R&D, DCCI

In the growing geo-economic era, economic blocs are expanding manifold regional and sub-regional trade and business impacts. Of many, EU, ASEAN, APEC and NAFTA are predominant and much talked for trade and integrated economic prosperity. ASEAN, with legacy of 50 years, was seen significantly contributing to regional trade and business proliferation as it is a common economic bloc of 10 countries amounting USD 3 trillion GDP and trade bloc of around USD 548 billion and almost $2.5 trillion international trade globally. The restive emergence of ASEAN in terms of trade, physical connectivity have made this economic bloc geo-strategically and geo-economically important for other emerging and developing economies in Asia including Bangladesh.

ASEAN endeavoured a large economic Master plan Year 2025 featured by interregional physical, trade and infrastructure connectivity extending to China with a view to reshape the regional economic context and tighten the multilateral economic engagement.

Off late, Bangladesh became branded as an economic miracle and model for LDC due to its prudent macro-economic management with exemplary achievement in UN MDG agenda. With this consistent performance, many heavy-weight multinational companies like Merill Lynch, Goldman Sachs, JP Morgan, UBS remarked positively high about Bangladesh. IMF forecasts Bangladesh potential 32nd largest economy by 2022. Bangladesh charted some game changing economic visions of economic graduation in to Middle-income country by 2021, Higher middle-income country by 2030 in conformity with UN SDG and High income developed economy by year 2041 attributed by $2.5 trillion GDP. These transformational visions can be definitively materialized through expansion of multi-lateral trade, business, investment and economic network sub-regionally and regionally.

ASEAN is yet to be harnessed for Bangladesh towards mutual trade and investment cooperation based on mutual close cooperation for multi-modal connectivity and FTA. This regional economic connectivity can socio-economically benefit to greater extent and solidify the economic landscape by improving the fate of one billion people in this greater region which is the potential largest market in terms of population and open up a new trajectory for this region. Considering this indispensable and contemporary geo-economic thought, a forging Economic synergy between ASEAN and Bangladesh can be held.
Bangladesh, next to ASEAN, can align economically to equip our geo-economic strength which enables to secure a geo political importance. Bangladesh, adjacent to Myanmar, can continue strategic economic diplomacy for bilateral trade enhancement and other strong economies like Malaysia, Singapore, Hong Kong to ease access to mainstream of ASEAN trade bloc.

Since regional integration of trade and economies are more exposed and functional recently rather than shared globalisation in recent global economy, Bangladesh can follow and integrate regionally with strong and emerging trade and economic bloc.

In the next decade, the ASEAN Economic Community could make the region’s economies by 7.1% and 14 million new employment commented a regional market of almost 1 billion people.
The AEC might eventually unleash significant unforeseen potential for the ASEAN countries – especially once the TPP and RCEP, having 40% and 30% of global GDP once come into force and this shared declaration justifies the affirmation of strengthening entire economic bloc.

Currently the bilateral trade is around $215 Million with average import of Bangladesh from ASEAN countries is 16%, but export to ASEAN countries from Bangladesh is 1.6%. As soon as ASEAN Free Trade Area (AFTA) established, ASEAN members have made significant progress in the lowering of intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. More than 99 percent of the products in ASEAN-6 comprising Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand have been brought down to minimum 0-5 %tariff. And, this trading region can create new trade leverage for access of diversified Bangladeshi products paving industrial and trade diversity.

Bangladesh needs to do as follows in order to reap trade benefit and related optimum privileges:

  • Bangladesh is far behind to regional and global connectivity due to defensive diplomatic policy position though there are many regional trading and economic blocs which could be boon for Bangladesh.
  • Joint economic mission can be set up with respective country of ASEAN to pursue the trade diplomacy to greater extent.
  • Expression of interest to be an observer member of ASEAN and intend to be a strategic member of ASEAN for mutual trade benefit.
  • Connecting ASEAEN can open up the window to reach out pacific countries and Latin American countries through TPP as it is difficult for individual Win Win deal with Mexico and Newzealand in tarde.
  • Our economic leaders, policy experts, economists and academicians, economic advisors who are entrusted with economic planning need to think of frequent global economic shift and orders which can benefit us taking necessary protective and aggressive economic strategies to keep trade landscape vibrant and safe.
  • Bangladesh, as local SAFTA is not performing, is required to adopt result oriented regional orientation policy economically to bring about diverse trade related potentials to intensify and enhance the trade volume as our target of export earning is steadily incremental.
  • EPB can open up foreign office in ASEAN member countries to know their market , growth and trade dynamics and promote our trade of goods and services.
  • Organize frequent trade, Road Show, Investment summit, Matchmaking session and focused events could be organized to introduce our brands and business culture and trade environment.
  • Negotiate ASEAN for meaningful and appropriate preferential/LDC entitlement of DFQF facility implementation.
  • Bangladesh has to link Asian High-Way and Trans-Asian Railway as per the desired route of connectivity initiatives to ease multilateral trade growth.

Bangladesh, India and China keep are regional top economic Growth performers over past couple years. Therefore, Bangladesh will have stiff competition against India in s ecuring safer and larger trade partnership with ASEAN as India is a relatively huge economy and alone can partner ASEAN.

There are many evidences of ASEAN integration and being the centre of intensified global economic attraction left an understanding that Bangladesh, is required explore access to global trade landscape expanding smooth and friendly regional trade, economic relation with neighbours. This indicates the growing intra ASEAN trade rise may lead to new growth wave of trade and business from Bangladesh.

Since relocation business are mainly aimed at some ASEAN countries like Thailand, Indonesia, Vietnam and Bangladesh in South Asia. This common sourcing home of Chinese low cost manufacturing business can generate new hope for a regional manufacturing hub which can in long term serve the world supplying inexpensive essential commodities, export growth basket and value surge.
AFTA, as a one of the longest serving economic bloc, aligns Japan and expands economic network through partnership called RECP(Regional Economic Cooperation partnership) represented by Australia, China, India, New Zealand, Korea for trade expansion. This proposed ASEAN and RECP tie is projected as the second largest  shared economic cooperation accounting 30 percent of global GDP with opportunity of Bangladesh to enter into this large market. ASEAN is growing in width and breadth as ASEAN members are united to create a more engaging and liberal trade forum under the unanimously agreed AEC endorsed by all ASEAN head of states. AEC was signed to spearhead common economic interests with the philosophy of ‘One vision, One Community’ and Bangladesh should act and address these all economic dimensions maintaining regional trade eco system encompassing tariff and non tariff barriers to extend trade and GDP ratio.

Against the compounding profile of ASEAN, Bangladesh can formulate strategic action plan and grave diplomatic engagement for focused trade growth and diversity. Our Export oriented economic growth idealism export to GDP ratio extraordinarily demand rapid new trade market development and destination. We must bear in mind that it is really hard for Bangladesh to create Win-Win economic deal with each ASEAN members but entire bloc backed by economic integration is relatively easy for new trade horizon  realizing economic graduation vision of Bangladesh by Year 2021 and Year 2030.

failed

We send out weekly newsletter.It's free!

Our intelligent team curate fresh news & updates to entertain our valued audience

You are almost done. Please check your inbox or spam folder to confirm your subscription.