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The goal is to retain the market, |
Bangladesh enters trade negotiations with two major trading partners. Finance advisor in a talk to the press stressed on for more time in the ongoing negotiations with the USA. Trade deficit reduction is the focus of this ongoing discussion as Bangladesh enjoys a surplus of $6 billion. Meanwhile, a Chinese delegation led by the Chinese minister is scheduled to arrive in May in a bid to start negotiation on investment. The Chinese stressed on signing two MOUs by June in this regard. Trade between the two countries is heavily [in favor of]China,[Bangladesh incurring] a deficit of more than $27.28 billion.
Bangladesh's export to the USA crossed $8 billion while Bangladesh's export to the China reaches $715 million. Among the major import sources, India gave Bangladesh more access to its market and Bangladesh's exports crossed $1 billion mark long ago. Most notable thing is trade deficits with India declined markedly in recent years( it increased slightly last year) than those of with the China.
Moreover, our export to the US market is growing gradually. The tariff debate paves the path for more export. Lowering the $6 billion deficits is at the heart of this negotiations. Since we do not have an alternative to lose this market, we have to retain this market. $8 billion + market is more worthy to us. By retaining it we will focus on other discussion. There is no other market yet ready for us to pay more than $8 billion every year. The optimum solution for Bangladesh in this negotiations is to retain this market. For that,we need to depreciate the currency even more.
And this kind of strategy will be adopted by other countries too. India in the wake of tariff debate significantly lowered its tariff on US items. Pakistan also did so. Vietnam promised to bring it down to zero. What we are seeing is local optimum solution (retaining the market is leading to global optimum) is leading to global optimum if both the negotiating parties agree.
Chinese market is equally important for us. If barriers to entry are removed and local exporters increased their export, we have a fair chance to capture a market in that country. China already expressed interest importing mango,jackfruit from Bangladesh. It is indeed a good move. If we add value to our agricultural products and export them or use them locally ,it will contribute more to our economy. Potato is a great source of making ethanol,biofuel. Instead of exporting potato and mango, if we export potato flakes,mango pulps it will earn more forex. In addition, beer can also be made from potato. We can use the biofuel locally and export the beer abroad. The use of biofuel could significantly lower the transport cost. I do not think others import mango,potato for consumption purposes only. Moreover, the move has potential to increase the price of local mango, casting a shadow over agro processing industry that is doing remarkably well.
Retaining the existing market, expanding to new market and protecting the domestic producers/ companies should be objective of Bangladesh's trade negotiation team. A bird in hand is worth two in the bush.
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