The 24th ASEAN (Association of Southeast Asian Nations) Summit recently concluded in Nay Pyi Taw, Myanmar. The theme of this year’s summit was “moving forward in unity to a peaceful and prosperous community.” Indeed, the ASEAN states have been moving forward steadily over the last few decades. Our neighbouring country, Myanmar, as a member of the association, is getting numerous benefits from the trade bloc while India is very much eager to get the membership of the association considering its potential economic benefits. Then why would Bangladesh lag behind and not try to join the trade bloc?
To reduce dependency on the West and narrow its trade gaps with other countries, the best viable option for Bangladesh is to look for newer export destinations. It has always been better to join a trade block for international trade as economic alliance guarantees more benefits than bilateral trade. We already have a good trade relationship with the West, especially with the USA and European counties. Now the time has come to follow the “Look East” policy, which will bring huge benefits to Bangladesh if the country can prove its immense potentials.
Due to her geographic and strategic proximity, Bangladesh has been enjoying very close commercial links with most of the ASEAN countries. The importance of Bangladesh joining ASEAN has been intensified by the frustration over the tardy progress in Saarc activities compared to the success of other regional bodies. Saarc was established with the aim to promote economic and socio-cultural development in the region. Since its inception, the association focused mainly on economic cooperation among the member states, and did not keep any scope for addressing political disputes, thinking that political issues would hamper economic cooperation in the region.
But they failed to comprehend the fact that without resolving political disputes among the Saarc nations, it is not only difficult, but also quite impossible to facilitate regional cooperation. Besides, mutual consensus on regional peace is one of the important prerequisites to regional cooperation. But the Saarc member states, especially India and Pakistan, consider each other as threats. Long-running disputes and tensions between India and Pakistan have marred the progress of Saarc. The regional association has so far failed to achieve anything substantial except SAFTA (South Asian Free Trade Agreement) and SAPTA (Saarc Preferential Trading Agreement).
SAPTA was signed to remove trading barriers like tariff and para-tariff and giving special trading facilities to LDCs like Bangladesh, Nepal, and Bhutan. This agreement has enabled Bangladesh to enjoy some specific trading privileges while exporting goods to India. But India does not get the same facilities from Bangladesh. So Bangladesh had to develop a bilateral trade relationship with India. Bangladesh is heavily dependent on India for imports of various items and our trade deficit with India has now crossed $4bn. So Dhaka is more concerned about how to reduce Bangladesh’s trade deficit with India.
Bangladesh’s trade deficit with India remained high at $4.17bn in the FY2012-13 as different non-tariff and para-tariff barriers have limited the country’s exports to India. It was hoped that Bangladesh’s trade deficit with India would come down as India gave duty-free access to Bangladesh’s main export products – readymade garments – in late 2011.
But a number of states in India were not following its central government’s direction of duty-free access facilities for Bangladeshi RMG products. So earnings from export of RMG products were not satisfactory and could not play the role in reducing the trade gap with India at the desired level. Thus para-tariff and non-tariff barriers have continued to limit Bangladesh’s exports to India, preventing the existing trade gap between the countries from narrowing down.
Thus, there is little hope for reducing the trade deficit with India to a great extent. So there is a pressing need for increasing its export earnings in order to reduce its overall trade gap with other countries. In order to make the export basket heavier, it is high time for Bangladesh to boost relations with ASEAN nations. We have to work towards integrating Bangladesh into the ASEAN economy whose trade volumes are running at more than $1.5tn per year. If we consider ASEAN as a single entity, it would rank as the ninth largest economy in the world.
Bangladesh has been enjoying good trade relations with ASEAN countries. However, we have great potential of increasing export volume with the ASEAN members. The area of relationship with ASEAN countries will be in the field of export of goods, including non-traditional goods, export of manpower, export of services including tourism, culture, and education. Moreover, Bangladesh has the potential to become an investment destination as it still has a cheaper labour market, which will attract the 10 Southeast Asian countries to invest in Bangladesh.
Bangladesh formally joined the ASEAN Regional Forum in 2006-2007 and the country now stands directly at ASEAN’s western door. There is a need for Bangladesh to widen its economic relations with the South Asian states, especially ASEAN member countries, which in turn will bring greater benefits to Bangladesh. What is now needed most is to justify Bangladesh’s claim to become a future member of ASEAN, which will improve the existing trade relations with ASEAN member countries.