The Cabinet nod has been received for Sri Lanka to commence discussions with Bangladesh to enter into a preferential trade agreement.
Both Sri Lanka and Bangladesh act as stakeholder member countries of the accords namely SAARC Preferential Trading Arrangement (SAPTA), South Asian Free Trade Area (SAFTA), Global System of trade Preference (GSTP), Asia – Pacific Trade Agreement (APTA) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
However, trade movements between the two states lie at a minimum level despite special provisions under the aforementioned accords.
During the diplomatic tour of the Prime Minister Mahinda Rajapaksa to Bangladesh in March, the leaders of the two member states had agreed upon the requirement of entering into a free trade accord to strengthen economic relationships between the two countries.
It has also been agreed upon to look into the possibility of entering into a preferential trade agreement with a short list of goods as the initial step.
Accordingly, the Cabinet of Ministers has approved the proposal presented by the Minister of Trade Bandula Gunawardena to hold discussions with the relevant authorities of Bangladesh with regard to entering into a preferential trade agreement with the country.
The Government is confident a PTA will boost trade between Sri Lanka and Bangladesh, which is relatively small at $ 200 million, the Daily FT reported.
Sri Lanka’s imports from Bangladesh account for 0.3% of the total. Last year’s value was $ 48 million up from $ 41 million in 2019 but lower in comparison to $ 44 million in 2017. Sri Lanka’s exports to Bangladesh account for only 1.5% of the total. Last year the value was $153 million, down from $ 162 million in 2019.
Once finalised, Bangladesh will be the third South Asian country with which Sri Lanka has a free or preferential trade arrangement after India and Pakistan. (NewsWire)