Dhaka prefers economic coop deal to FTA with KL
Doulot Akter Mala
Dhaka will send a proposal of signing an economic cooperation agreement instead of free trade agreement (FTA) with Kuala Lumpur, considering revenue aspects and incorporating manpower export issue.
The government has estimated a significant amount of revenue loss, if FTA is signed with Malaysia.
“We are working on an economic cooperation agreement. Very soon we will send it to the Malaysian government,” commerce secretary Ghulam Hossain told the FE Tuesday before leaving to Geneva for joining the WTO (World Trade Organisation) conference.
Bangladesh will not be benefited without a service agreement with Malaysia, he added.
According to an estimation of the National Board of Revenue (NBR), if FTA is signed with Malaysia, the government will lose Tk 29.94 billion tax, of which, Tk 9.88 billion as customs revenue and Tk 20.06 billion as supplementary duty (SD).
Earlier, Malaysia sent a template with its proposal of signing FTA with Bangladesh. However, following strong opposition of the revenue board, the Ministry of Commerce has recently taken the move to send a ‘counter template’ to Malaysia, preferring signing of an economic cooperation agreement instead of FTA, a senior NBR official said.
“We have opposed the move of signing FTA with Malaysia, as a large number of importers will be diverted to Kuala Lumpur from China for importing duty-free products,” said a senior revenue board official.
Bangladesh customs will lose a significant amount of revenue, if such an agreement is signed, posing a threat to achieving the import revenue collection target, he also said.
Besides, the NBR is not in favour of signing any trade agreement with Malaysia without incorporating the manpower export issue, he added.
There is a huge trade imbalance between Bangladesh and Malaysia. Bangladesh imported goods worth $1.762 billion from Malaysia in the fiscal year 2010-11, while it exported goods worth $43.87 million in the same fiscal.
Bangladesh mainly imports edible oil, vegetable fat, machinery, mechanical equipments, electrical goods, base metal, wood and wood articles, sulphur, organic chemicals, plastic, textile and textile articles from Malaysia.
On the other hand, major export items from Bangladesh to Malaysia include knitwear, woven garments, tobacco, home textile, raw jute, jute goods, dry food, agro-products and frozen fish.