It is not clear how ambitious the draft free trade agreement will be and whether it will significantly reduce barriers to trade. The Bangladeshi government has proposed a reduction in the export duty to 5 percent from the current 13.5 percent, according to Bangladeshi Trade Minister Tofail Ahmed. This is in line with Bangladesh`s SAFTA commitment to reduce tariffs to 5% by the end of 2015. Ahmed also called on Sri Lanka to remove non-tariff barriers for Bangladeshi products, especially medicines. The signing of a bilateral free trade agreement could still be years away. While both countries have an interest in developing bilateral trade, countries are also competing in labor-intensive manufacturing, especially in the apparel sector. Bangladesh is facing a slowdown in exports. It will continue to try to diversify trade outside its traditional export markets, the EU and the US. In the past, many discussions have taken place with many countries on this issue, but a free trade agreement has remained elusive. If this free trade agreement is signed, Sri Lanka will be the only South Asian country to have access to 3 major South Asian economies, which are worth about $1.7 billion for Sri Lankan exports. It would also mean that Sri Lanka will be able to expand its activities to many other countries that also use the FTA agreements. The BCIM Economic Corridor (Bangladesh, China, India and Myanmar Corridor) is also fully realized through this free trade agreement.
The FTA is an international agreement between two or more countries aimed at reducing or reducing barriers to trade and moving closer to economic integration. FTA offers lower or zero tariffs (tariff concessions) on exports and imports of goods and components allocated under the Free Trade Agreement. This makes products more competitive with exports and imports from non-FTA partner countries. . . .