Bangladeshi Prime Minister Sheikh Hasina has given permission to relevant authorities to start necessary negotiations for signing the Comprehensive Economic Partnership Agreement (CEPA) with India. He also agreed to jointly sign the agreement with the Indian Prime Minister during his visit to India on September 5-7. Through this negotiation, Bangladesh is going to sign a free trade agreement (FTA) with any country for the first time. Meanwhile, China and Japan have also expressed interest in signing a free trade agreement with Bangladesh, which is still at the assessment stage.
CEPA is slightly different from FTA as it brings together issues related to trade in goods and services, investment, intellectual property rights and e-commerce. If this agreement is signed with India, Bangladesh’s export earnings will increase by 190% and India’s by 188%. Also, the GDP of Bangladesh and India will increase by 1.72% and 0.03% respectively, said the Dhaka-Delhi feasibility study.
According to the Commerce Ministry, signing such deals with major trade partners will definitely bring good results. However, there is also a risk of reduced revenue. In the financial year 2021-22, Bangladesh imported goods worth Tk 144,160 crore out of which revenue was Tk 17,964 crore. If this CEPA is signed, the import revenue will come down to a large extent.
Since services and investment related issues will be covered through CEPA, Bangladesh needs to ensure adequate safeguards and dispute settlement mechanisms. Dhaka should also emphasize on incorporating the facilities and provisions available in the South Asian Free Trade Area (SAFTA) Agreement and the SAARC Agreement on Trade in Services (SATIS) at the time of signing this agreement. It is also desirable to have representatives of leading business organizations of the country during the signing of this agreement. Above all, Bangladesh should hold in-depth and comprehensive discussions keeping in mind that this CEPA agreement should be a win-win deal for both countries.