The preferential trade agreement (PTA) signed yesterday between Bangladesh and Bhutan is expected to boost their bilateral trade by 15% per year.
"The trade volume [between Bangladesh and Bhutan] will double within the next 5-6 years," Commerce Minister Tipu Munshi said at a press briefing at the signing ceremony.
Commerce Secretary Dr Jafar Uddin said, under this trade deal, Bhutan will enjoy a 100% duty-free export facility for another 16 items while Bangladesh will get the same facility for 10 new items, including apparel.
Bangladesh and Bhutan are now enjoying the duty-free export facility for 90 and 18 items respectively.
The commerce secretary said, "Under this PTA, we have a scope to review the product list through consultation."
Tipu Munshi and Bhutanese Economic Affairs Minister Loknath Sharma signed the PTA on behalf of their respective countries.
The signing of the treaty marks the 50th anniversary of bilateral and diplomatic relations between the two countries.
Prime Minister Sheikh Hasina and her Bhutanese counterpart Lotay Tshering joined the signing ceremony virtually.
Ministers and high officials from both countries expressed hope that the PTA will bring a mutual benefit for the two neighbouring countries.
Under the agreement, 100 Bangladeshi products, including RMGs, will get duty-free access to the Bhutanese market while 34 Bhutanese items will have duty-free access to Bangladesh's market, according to the information from the commerce ministry.
Trade between Bangladesh and Bhutan amounted to $12.77 million in the fiscal 2008-09 and reached $57.46 million in FY19.
Of the amount, Bhutan's exports stood at $49.9 million while those of Bangladesh only at $7.56 million, according to the Export Promotion Bureau.
Ali Ahmed, chief executive officer of the Bangladesh Foreign Trade Institute (BFTI), told The Business Standard, "It is an agreement between two countries, aiming to be mutually benefited."
With the PTA, the balance of payment might be in favour of Bhutan, and Bangladesh will be able to import Bhutanese bolder stone at a competitive price, he said.
Both countries have a provision to gradually increase the number of products, and after a certain time, it may turn into the Free Trade Agreement (FTA) if both the countries gain trust, said the BFTI boss.
Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said, "We are going to move out of the least developed country status in 2024. That is why we are seeking extended privilege from many countries. Such trade deals were pending with Bhutan, Nepal and Indonesia."
The PTA with Bhutan is an ice-breaker for Bangladesh to enter a free trade era, he added.
He also expressed hope that a number of trade agreements will be signed in coming days.
According to commerce ministry officials, Bangladesh is now in talks with 11 countries for inking PTAs and FTAs with them, and responses from these countries have been positive.
Bangladesh has made significant progress in signing PTAs with Nepal and Indonesia, and the signing could take place by June next year.
Mohammad Hatem, first vice-president of Bangladesh Knitwear Manufacturers and Exporters Association, said Bangladeshi knitwear apparel makers now can enjoy duty-free facility in the Bhutanese market through this PTA.
Bhutan's official dresses are traditional ones but there is a scope to export a large volume of casual apparel items, he added.
Foreign Minister AK Abdul Momen, Foreign Minister of Bhutan Tandi Dorji and its Economic Affairs Minister Lyonpo Loknath Sharma spoke on the occasion while Commerce Secretary Dr Jafar Uddin gave the welcome address.
Among others, Prime Minister's Private Industry and Investment Adviser Salman Fazlur Rahman, and Foreign Secretary Masud Bin Momen were present on the occasion.