The bilateral trade between Bangladesh and Saudi Arabia stood at $1,019 million in 2019
Saudi Arabia is looking at signing a free trade agreement (FTA) with Bangladesh in a bid to increase bilateral trade, which is considered below its potential.
A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them.
Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
The bilateral trade between Bangladesh and Saudi Arabia stood at $1,019 million in 2019, according to available statistics.
In 2019, Saudi Arabia exported goods worth $638 million to Bangladesh while Bangladesh exported goods worth $381 million to Saudi Arabia.
According to Arab News, Saudi Arabia is looking for more trading partners under FTA as the country aims to increase non-oil exports share in the gross domestic product (GDP).
The kingdom is resuming negotiations for free trade agreements with 11 countries, Okaz paper reported, citing a circular by the Federal of Saudi Chambers (FSC) to all chambers of commerce operating in the kingdom, based on directions of the General Authority for Foreign Trade (GAFT).
The targeted countries are: China, India, Pakistan, Australia, New Zealand, Britain, Indonesia, the Philippines, Bangladesh, Sri Lanka and the US.
While talking to The Dhaka Tribune, a BGMEA leader said that Bangladesh has major potential to increase RMG exports to KSA under market diversification.
Meanwhile, the kingdom aims to export services including transport, distribution, professional and financial services, communication services, postal services as well as express mail, media, hotel, construction and contracting, education and training, travel and tourism, environmental and entertainment.
The Saudi Exports Development Authority (SEDA) announced on Wednesday, it will identify over 120 international tendering opportunities in a number of target countries, mainly covering construction and industrial supplies and infrastructure projects.
A request to comment about the circular was sent to the Federal of Saudi Chambers (FSC), but they did not reply.
Meanwhile, Bangladesh’s Ambassador Dr Mohammad Jabed Patwari, in a meeting with Chairman of the Eastern Chamber of Commerce of Saudi Arabia Dr Abdul Hakim Al Khaldi and its Secretary-General Abdul Rahman Al Wabel on June 30, 2020, laid emphasis on increasing trade with the Kingdom of Saudi Arabia.
He proposed to KSA businessmen to import more readymade garments, handicrafts and leather goods from Bangladesh.
In the meeting, Jabed Patwari asserted that Bangladesh is currently the second-largest exporter of garments in the world and has been manufacturing and exporting quality garments.
Hence, Saudi Arabia can import any type of quality garment from Bangladesh.
Moreover, Patwari also said that Bangladesh’s handicrafts and leather products are of export quality and wished to export these products to the kingdom.
The main products that Saudi Arabia exported to Bangladesh in 2019 are propylene polymers ($209M), nitrogenous fertilizers ($109M) and ethylene polymers ($103M).
During the last 24 years, Saudi Arabian exports to Bangladesh increased at an annualized rate of 12.8%, from $35.3 million in 1995 to $638 million in 2019.
In 2019, Saudi Arabia did not export any services to Bangladesh.
In the same year, the main products that Bangladesh exported to Saudi Arabia were knit T-shirts ($67.7 million), non-knit women's suits ($62.5 million) and felt or coated fabric garments ($44.6 million).
During the last 24 years, Bangladesh’s exports to Saudi Arabia increased at an annualized rate of 17.8%, from $7.44 million in 1995 to $381 million in 2019.
In 2019, Bangladesh also did not export any services to Saudi Arabia.
In 2019, Saudi Arabia ranked 33 in the Economic Complexity Index (ECI 0.94), and 26 in total exports ($228B). That same year, Bangladesh ranked 122 in the Economic Complexity Index (ECI -1.01), and 52 in total exports ($47.2B).
Though several South Asian and Southeast Asian countries have proposed to sign FTA with Bangladesh in the past, no decision has been made in this regard as of now.