Trade Agreements Between Sri Lanka and Bangladesh: A Comprehensive Overview
The neighboring countries of Sri Lanka and Bangladesh share a long-standing economic relationship. With the aim of enhancing bilateral trade and investment, the two nations have entered into several trade agreements over the years.
In this article, we`ll take a closer look at the major trade agreements between Sri Lanka and Bangladesh, their impact on trade relations, and the potential for future growth in trade between these two nations.
The South Asian Free Trade Agreement (SAFTA)
The South Asian Free Trade Agreement (SAFTA) is a multilateral trade agreement between the SAARC (South Asian Association for Regional Cooperation) member countries, which include Sri Lanka and Bangladesh. The agreement was signed in 2004 with the objective of increasing trade and investment flows within the region.
SAFTA aims to create a free trade area among the SAARC member countries, promoting the liberalization of trade and investment by eliminating tariffs and non-tariff barriers on goods traded between member countries.
Under SAFTA, Sri Lanka and Bangladesh have been able to expand their bilateral trade relationship. In 2019, the two countries` trade volume was USD 112 million, with Sri Lanka exporting goods worth USD 79.33 million to Bangladesh and importing goods worth USD 32.78 million from Bangladesh.
The Bangladesh-Sri Lanka Free Trade Agreement (BSFTA)
The Bangladesh-Sri Lanka Free Trade Agreement (BSFTA) was signed in 2013, with the aim of boosting bilateral trade between the two countries. It covers a wide range of products ranging from textiles and clothing to electrical and electronic goods, chemicals, pharmaceuticals, and agriculture produce.
The agreement allows for the duty-free import and export of goods between the two countries, which has led to increased trade volumes. Since the signing of the agreement, bilateral trade between Sri Lanka and Bangladesh has grown significantly, with the volume of trade reaching USD 143.58 million in 2018.
Potential for Future Growth
Despite the growth in bilateral trade between Sri Lanka and Bangladesh, there is still a significant untapped potential for further expansion. Both countries have complementary economies and can benefit from increased trade and investment flows.
Sri Lanka has a strong export base in the tea, apparel, and tourism sectors, while Bangladesh has expertise in textiles, pharmaceuticals, and IT services. These industries have the potential to drive further growth in trade between the two countries.
Furthermore, there are opportunities for collaboration between Sri Lanka and Bangladesh in areas such as infrastructure development, renewable energy, and tourism. The two countries can also jointly explore regional markets and take advantage of the vast consumer base in South Asia, where demand for a wide range of products and services is growing.
Conclusion
The trade agreements between Sri Lanka and Bangladesh have played a crucial role in enhancing economic relations between the two countries. The SAFTA and BSFTA have paved the way for increased trade volumes, and there is vast potential for further growth in the future.
As both countries continue to develop and diversify their economies, there is an increasing need for collaboration and partnership in trade and investment. By working together, Sri Lanka and Bangladesh can drive sustainable economic growth and actively contribute to the development of the region as a whole.