Bangladesh will provide duty-free trade facilities to Indonesian products under the Indonesia-Bangladesh Preferential Trade Agreement (IB-PTA).
Under the agreement, Bangladesh will allow duty-free access to 152 Indonesian products that are currently subject to MFN (most-favoured-nation) tariff.Bangladesh and Indonesia launched the Preferential Trade Agreement (FTA) in February 2019 and held two meetings in February and July of that year.
Following the meetings, two countries had exchanged ‘Initial Request List’. Under the requested list’s tariff nomenclature, Indonesia sought duty-free facilities to 271 products. It also sought a 50 per cent margin of preference’ (MOP) on 33 products and 40 per cent margin of preference on five products.
After reviewing the list given by Indonesia, Bangladesh reviewed that 157 products are under the SAPTA offer list —— considered as sensitive products.
The Agreement on SAARC Preferential Trading Arrangement (SAPTA), which envisages the creation of a Preferential Trading Area among the seven-member states of the SAARC was signed in Dhaka in April 1993. The objective of the SAPTA is to promote and sustain mutual trade and the economic co-operation among the member states through the exchange of trade concessions.
At a recent meeting presided over by Tariff Commission chairman Tapan Kanti Das discussed the Indonesia-Bangladesh Preferential Trade Agreement.
At the meeting, representatives from different ministries, the national board of revenue (NBR) and business bodies were present and placed their observations.SM Sumaya Zabeemn, assistant head of International Cooperation Division of Tariff Commission, said initial request list given by Indonesia includes products from 23 duty chapters.
Of the list’s products, Indonesia enjoys zero duty on nine products and pays one per cent duty on 16 products, five per cent duty on 60 products, 10 per cent duty on 69 products, 15 per cent duty on eight products, and 25 per cent duty on 144 products.
Of the initial request list of Indonesia, 157 products are included in the SAPTA’s Bangladeshi offer list, informed Sumaya Zabeemn.
On the other hand, Bangladesh has also sought the same duty-free access for around 300 products under the Indonesia-Bangladesh Preferential Trade Agreement.
Jute and jute goods, leather and leather goods, pharmaceuticals and garment items are in the list of products, said sources at Tariff Commission said.
The bilateral trade between Bangladesh and Indonesia increased significantly over the last few years. The two-way trade reached $1.97 billion in 2018 with a 48 per cent growth since 2014.