Search the Community

https://thefinancialexpress.com.bd/economy/bangladesh-prepares-to-face-challenges-after-transition-from-ldc-1625576226 Published: July 06, 2021 18:57:06 Bangladesh prepares to face challenges after transition from LDC Bangladesh is focusing on bilateral free and preferential trade deals as a strategy to overcome the possible losses of global trade concessions after its graduation to a developing economy. Studies on the feasibility of signing Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) with a number of countries have been completed, according to an official document. The countries and organizations include Malaysia, Vietnam, Thailand, Japan and Eurasian Economic Commission. The possibility of Bangladesh signing such trade agreements with China, Myanmar, Nigeria, Mali, Macedonia, Mauritius, Jordan, USA, Iraq and Lebanon is also being explored, reports UNB. Meanwhile, a Comprehensive Economic Partnership Agreement (CEPA) between Bangladesh and India is also on the anvil. Bangladesh Foreign Trade Institute (BFTI) and Indian Foreign Trade Institute are preparing a report on a joint study on CEPA. The CEPA is a bit different from FTAs as it covers a lot of issues such as trade in goods and services, investment, intellectual property rights and e-commerce. Bangladesh has signed a bilateral PTA with Bhutan on December 6, 2020. Under the agreement, 34 Bhutanese products will get duty-free access to the Bangladeshi market and 100 Bangladesh products to get similar access to Bhutan. The commodities from Bangladesh include baby clothes and clothing accessories, men's trousers and shorts, jackets and blazers, jute and jute goods, leather and leather goods, dry cell battery, fan, watch, potato, condensed milk, cement, toothbrush, plywood, particle board, mineral and carbonated water, green tea, orange juice, pineapple juice, and guava juice The 34 products from Bhutan that will get duty-free access to the Bangladesh market include orange, apple, ginger, fruit juice, milk, natural honey, wheat flour, homogenized preparations of jams, fruit jellies, marmalades, food preparations of soybeans, mineral water, wheat bran, quartzite, cement clinker, limestone, wooden particle boards, and wooden furniture. Both the countries will be able to increase the number of items gradually through consultation. PTA negotiations with Nepal are at the final stage. Significant progress has also been made in formal talks aimed at signing a bilateral PTA with Indonesia. Work on a joint study aimed at conducting a free trade agreement with Sri Lanka is at the final stage. In addition, to increase competitiveness in exports, the document mentioned that the government has continued to provide export incentives to 36 products as in the previous fiscal year. The government has identified 17 products to boost exports in the aftermath of the epidemic, which is expected to play a strong role in sustaining export growth after Bangladesh’s transition from the least developed countries in 2026. To reduce the trade deficit, the document said, measures are being taken to remove tariff and non-tariff barriers by executing bilateral trade agreements. Such agreements have already been signed with 44 countries. Bangladesh, as per the rules and regulations of World Trade Organization (WTO), might lose some of its businesses as it will graduate from the LDC status. Bangladesh will formally graduate to middle income country from the LDC status in next three years. But it will continue to get some global trade concessions until 2027 as a three-year grace period will be added. As a result, from 2027 the duty facilities the country gets from WTO in import and export might be stopped. To avert the tough economic situation of the middle income country status Bangladesh has started its initiatives to avoid the middle income country status trap. Meanwhile, the EU has urged Bangladesh to improve labor standards for the continuation of the GSP. The bloc will review the current GSP in 2023.a Bangladesh's GSP status to the EU will end in 2024. The EU, however, will continue the same up to 2027 under a three-year grace period.

Symphony now meets smartphone demand from own plant A new era is dawning in the manufacturing industry as local companies are putting their best foot forward towards building a ‘Made in Bangladesh’ brand. One such brand is Symphony, which is going neck and neck with foreign companies to grab a bigger pie of the smartphone market that was dominated by imports until recently. The company is assembling about 1.5 lakh smartphones every month in its plant in Ashulia on the outskirts of Dhaka and has been meeting all its local demand from the plant since June last year. The factory is also making basic phones at such a pace -- currently 1.25 lakh units a month -- that no imports would be required by the year end, said Jakaria Shahid, managing director of Edison Group, Symphony’s parent company. “We stopped importing smartphones last June and our target is to meet the entire local demand from our plant by December this year.” The plant currently manufactures about seven to eight lakh units of basic and smartphones every month, according to Shahid, also the general secretary of the Bangladesh Mobile Phone Importers Association. In the face of rising demand, the company is working to expand the plant’s capacity and build two more units, he told journalists, who were taken to Ashulia for a tour of the factory. “The two new plants should be ready by 2022 and then we will seek to explore export opportunities.” Symphony, which has a market share of 30 per cent, is splashing out about Tk 100 crore for the three plants. They also have a plan to make mobile accessories, which will go some way towards building a total value chain for mobile assembling. “We will develop software, mobile applications and games as well, while the plants will churn out about two lakh units of accessories.” The factory is now adding 20 per cent value to the products and that will rise to 30 per cent over the next five years. The government offered huge tax benefits for mobile assembling in fiscal 2017-18 after which seven plants were set up in Bangladesh, with another two in the pipeline. Symphony -- which began its journey in 2008, becoming Bangladesh’s first mobile phone brand -- has been leading the market for the last five years but has now shifted focus to handsets in the price range of Tk 4,000 to Tk 8,000. The main demand lies in this segment, Shahid said, while urging the government to assess the market before giving licences for new plants. “The quality of our phones is better than those made in China,” said Md Maksudur Rahman, senior director of business operation at Edison Group. About 3.10 crore handsets were sold in 2019, of which 80 lakh were Symphony’s, said MA Hanif, head of sales. Source This is great news, Our economy needs to diversify and high tech factories are a great way of doing so.