BANGLADESH AND FREE TRADE AREA: REGIONAL AND BILATERAL ROUTES

Outline

1. Introduction 2. Bilateral and Regional FTA: Mechanism and their complementarities 3. Consistency of Regional FTAs under the Existing WTO Disciplines 4. Criteria for a Successful Free Trade Area 5. Progress with Regard to Regional and Bilateral Approaches to FTA 6. Implications of Bilateral and Regional Approach to FTA for Bangladesh 7. Conclusion

BANGLADESH AND FREE TRADE AREA: REGIONAL AND BILATERAL ROUTES

Author: Sharif M. Hossain

DOI Link: DOI: https://www.doi.org/10.56888/BIISSj2005v26n3a2

ABSTRACT

To achieve the benefits of globalization, Bangladesh is engaging in bilateral and regional trading arrangements simultaneously. Two regional trading arrangements, SAFTA and BIMSTEC-FTA have already been finalised. At the same time, Bangladesh is considering three bilateral trading arrangements with India, Pakistan and Sri Lanka respectively. Now a number of pertinent questions are: What difference will it make for Bangladesh to sign bilateral FTA alongside regional FTA? Can bilateral FTA be a substitute for regional one? Which one will be beneficial for Bangladesh –bilateral trading arrangement, regional trading arrangement or some combination of bilateral or regional trading arrangement? Using the Global Trade Analysis Project (GTAP) model and data, the paper shows that welfare benefits of regional arrangements could be higher than bilateral arrangements. However, in regional arrangements, sometimes big economies may not offer handsome concession due to distinct interest with an individual country, and they offer large concessions in bilateral arrangements. In this respect a combination of bilateral and regional trading arrangements may be the viable policy options for Bangladesh.

BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

Outline