Trade round with India

Against such a testing backdrop, the Dhaka talks should be deemed to have ended on a forward-looking note. The Indian delegation leader S Ramasundaram characterised the outcome as a 'breakthrough'. But his Bangladesh counterpart Elias Ahmed was cautiously optimistic, saying there were no grounds for frustration. In the typical parlance of 'approach talks' to FTA, such negotiations are described as 'breakthrough talks'. That's why perhaps the Indian delegation chief chose to use the word 'breakthrough' to convey his impressions of the dialogue's outcome. However, what Bangladesh chief negotiator had to say was not basically at variance with Ramasundaram's observations. Ahmed's words --"we have entered the primary stage of FTA" -- are indicative of a step towards securing equitable trade terms with India.

So, the joint secretary-level talks may prove to be a precursor to a proposed free trade agreement between India and Bangladesh down the road. But, one has to wait and see how the process is taken forward by the next round of talks scheduled to be held in New Delhi in January. That is when the core trade issues, some of which commerce minister Amir Khosru Mahmud Chowdhury had once dubbed as 'trade disputes' are likely to be taken up. If we have been through the primary stage in Dhaka, the next round in New Delhi is going to see the hard bargaining phase.

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The importance of Dhaka negotiations basically lay in the setting against which these were held. A decision of the Indo-Bangla Joint Economic Commission (JEC) meeting held in Dhaka on July 14-16 prompted the trade talks. The JEC was revived after six years in hibernation and it's as part of the dialogue resumption process that the significance of the trade negotiations should be comprehended.

What the Dhaka encounters has yielded in concrete terms is: India has agreed to recognise Bangladesh's demand that she be accorded special and differential treatment (S&DP) to her exports to the Indian market.

One of the four prerequisites to the FTA talks that Commerce Minister Amir Khosru Mahmud Chowdhury had enumerated closely on the heels of the JEC meeting was to "obtain special and differential treatment to Bangladesh according to the WTO charter". It called upon strong economies to offer special trade terms to weaker economies for the next five to ten years. India seems to have theoretically acceded to this demand. What remains to be seen though, is how this 'recognition' of Bangladesh's demand is implemented by her in deed. There is an extant Indian pledge to accord duty-and quota-free access to 25 categories of Bangladesh products. Besides, Dhaka has put up a fresh list of 118 items for free access to Indian markets.

Bangladesh is for removal of tariff, non-tariff and para-tariff barriers by India under one package. New Delhi would like to adopt a piecemeal approach.

The deck seems to have been otherwise partially cleared for freeing up trade from Bangladesh side. India has offered 'a concessional dispensation whereby imported clinker could be certified by the Bangladesh Standard and Testing Institution (BSTI) instead of by BIS.' This could lead to reducing the licensing period for Bangladeshi cement. We think it augurs well that both countries have "agreed to start negotiations immediately for mutually recognising each other's standards."

The focus of Dhaka talks was naturally on updating and renewing the bilateral trade agreement signed by India and Bangladesh on October 4, 1980. It needed to be amended to fit in with the FTA perspective. The amendments suggested by both sides are on the table and these would be decided upon at a higher level between the two governments.

As to the provision for special and differential treatment (S&DT) to Bangladesh exports, the Indian delegation chief thought it would be embodied in the FTA, not in the revised bilateral agreement. Bangladesh says the 'essence' of the S&DT should be incorporated in the revised bilateral trade agreement. Let's see which way it goes.

FTA is something new for Bangladesh. And, especially in relation to India, it merits a deeper analysis before being adopted by her. It strikes a responsive chord in us, therefore, that the issue of signing up to FTA will be discussed with different chamber bodies, associations and think-tanks.