Interim govt moves to access RCEP
Summary:
The current interim government of Bangladesh kick-started to join the Regional Comprehensive Economic Partnership (RCEP). The government is increasing its efforts to seek membership of RCEP despite the previous government’s failure. An assessment by the Bangladesh Trade and Tariff Commission (BTTC) states that joining the RCEP block might boost Bangladesh’s export rate to its member nations.
Context:
An agreement for free trade between the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners is known as the Regional Comprehensive Economic Partnership (RCEP). The Interim Government of Bangladesh is speeding up its preparations to join RCEP, despite previous governments’ failed attempts to join the economic bloc, which includes the Asia-Pacific region, which accounts for one-third of global GDP.
According to an unconfirmed source, the commerce ministry reportedly sent a summary to the Chief Adviser for necessary authority to begin official processing with the bloc. The formal procedures will begin as soon as the consent is received from the headquarters.
Bangladesh took its decision to the bloc on 01 August 2023 in a workshop held at the commerce ministry. Bangladesh already finished investigations and reviews as required based on a commitment made by Vietnam. According to a senior official in order to proceed cabinet approval and clearance from the law ministry may be required.
A study conducted by BTTC shows that the majority of trade between Bangladesh and the RCEP members is goods trade. This study also stated that if free agreements for trade are signed between Bangladesh and other bloc members, Bangladesh’s exports might boost beyond 17% and GDP may grow up to 0.26 percent.
The RCEP deal commenced in January 2022 and As of now, 15 Asia-Pacific nations are party to the world’s biggest free-trade agreement. In this bloc there is no bar for any country/customs. Any country is eligible to apply for membership.
A noteworthy feature of RCEP is that it covers approximately 30% of global GDP, $12.7 trillion in trade, and 31% of FDI inflows which makes it the largest free trade agreement around the world.
Bangladesh will exit from the least developed country status in 2026 which could cost nonavailability of duty-free access. In such a scenario difficulties might arise to maintain its progression in bilateral export trade and securing potential destinations with RCEP members.
The existing members of RCEP are considered as an important trade partner of Bangladesh as these countries contribute to 43.92% of Bangladesh’s total global imports, 55.33% of tax revenue, and 58.56% of customs duty revenue. If Bangladesh enters into RCEP it could hamper the country’s revenue collection. Major sources like China, Japan, Indonesia, and Malaysia are losing their potential revenue.
However, the study also emancipated that if Bangladesh could increase its exports and other commerce within this country it would cover the potential revenue losses and also added that Bangladesh may generate revenue from various tariffs and charges, if not decreased as a result of RCEP admission.
After considering the pros and cons of RCEP accession, BTTC suggested the Bangladesh government take a favorable approach and modify some local laws and regulations if a situation arises.
Picture and Article Source: The Financial Express
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