BANGLADESH AND FREE TRADE AREA: REGIONAL AND BILATERAL ROUTES

This article explores the trade policy choices confronting Bangladesh in 2005, with particular focus on the prospects for regional and bilateral free trade arrangements. It reviews the global context of trade liberalisation under the WTO and situates Bangladesh’s strategy within the evolving architecture of South Asian regionalism, including SAFTA. The analysis evaluates opportunities in bilateral trade agreements with India, China, and other Asian partners, while also identifying the constraints posed by structural weaknesses in export diversification and competitiveness. It argues that while multilateralism remains the preferred framework, pragmatic bilateral initiatives may yield faster market access if carefully negotiated.

The body begins by presenting the WTO and global trade liberalisation trends of the early 2000s, setting the stage for Bangladesh’s policy debate. Section One examines SAFTA negotiations, outlining their potential benefits for Bangladesh but also the risks of asymmetry with India. Section Two evaluates bilateral routes, focusing on India, China, and South-East Asian economies, assessing tariff preferences, rules of origin, and non-tariff barriers. Section Three considers domestic readiness, highlighting the need for improved infrastructure, regulatory reform, and institutional strengthening. Section Four analyses potential welfare gains and distributional effects. The conclusion underscores that a dual strategy—actively engaging in regional FTAs while pursuing bilateral deals—would position Bangladesh to better leverage globalisation while protecting domestic interests.