Bangladesh-Canada Bilateral Trade - ICE Business Times
Since other major economic indicators (such as economic vulnerability would bring changes in Bangladesh's trade relationship with Canada. The long-standing friendly bilateral tie between Bangladesh and Canada has contributed to an enhanced trade relations between the two countries. The focus of. Canada's commercial relationship with Bangladesh has grown dramatically over the last 12 years. The value of bilateral merchandise trade has.
A series of recent economic stabilization programs, combined with efforts to privatize industries indicate a definite will to establish policies that would encourage international investment. Yet, inefficient governance, delays in exploiting natural gas and slow implementation of economic reform has reduced progress to a slow crawl.
Cultural and social relations: Relations about social and culture between Bangladesh and Canada is very good. Relations between the two countries are positive and there are approximately 24, Canadians of Bangladeshi origin living in Canada. Bangladeshi Canadian refers to a Bangladeshi person born in Canada or a Bangladeshi that has migrated to Canada.
Canada and Bangladesh enjoy a close relationship, and representatives of the two countries regularly meet to discuss bilateral, multilateral and regional issues. Canada always emphasizes the democratic characteristics and governance issues of Bangladesh.
Canada is one of our large development partners. The official number of Bangladeshi Canadians as of is 24, only. According to Statistics Canada, the Bangladeshi-Canadian population as determined by the census in the 10 Canadian provinces and 3 territories were They avoid all kind of access in political, religious, internal affairs. Besides Canadian Bangladeshi are live with peace and prosperity.
They have freedom to do any kind of legal work in Canada. Besides Canada always help Bangladesh at the time of danger, development, and hazard. Canada always supports Bangladesh in international forum. Canadian support in international forum makes Bangladesh powerful in the world stage. Canada- Bangladesh cultural and social bond is very positive and also very powerful.
Loyal friend like Canada is an asset for Bangladesh. Canada from the very past given many help, support and logistic help for Bangladesh. Many call this the "Bangladesh Paradox", meaning the country would be far better off if corrupt politicians kept clean.
Canada and Bangladesh relations
However, Bangladesh is making important strides in the right direction as programs tackling power shortages, investing in education and infrastructure, and improving agricultural yield are sure to improve the country's situation.
Currently, Bangladesh is saddled with one of the least liberal trade policy regimes in the world. Although most of the country's GDP comes from the service sector, complete liberalization of this, and other sectors, is not yet suitable. However, with a keen eye on the success of neighboring countries such as India, Bangladesh has realized that the majority of state owned enterprises are a drain on resources, costly, and poorly administered.
The country has embarked on a series of privatization programs that will in turn offer a series of substantial opportunities for foreign industries. With the help of organizations such as the Asian Development Bank, and continued support from countries such as Canada, the climate will become more conducive to foreign investment in the coming years.
Despite the obstacles to economic development, the government is trying to stimulate rapid economic growth for the country. The Bangladesh Export Processing Zone Authority is an agency of the Government of Bangladesh whose objective is to manage the various export processing zones in Bangladesh.
The Government claims to provide numerous incentives for investors opening factories in export processing zones EPZ'sincluding a tax holiday for five years. Labor unions and many other activities that are deemed detrimental to productivity are banned inside the EPZ's. Sustained GDP growth, averaging approximately 5. Government revenue collection improved impressively in fiscal year This allowed budget targets to be exceeded by. Bangladesh's momentous population growth has continued to be a strain on socio-economic and environmental progress, and the growing population threatens to skyrocket unemployment rates.
Bangladesh's economy wearily depends on the success of clothing exports abroad and huge cash injections through micro credit loans and foreign worker remittances. Despite the recent global economic crisis, apparel and textile exports have remained stable and export volumes have continued their growth.
With continued economic expansion and an improved political environment foreign investment will continue to grow. Until the global financial crisis gripped countries worldwide, Bangladesh was on target to meet the Millennium Development Goal of halving poverty by Yet progress in seems unlikely as factors such as increasing birth rate will undoubtedly quell the progress.
Cash injections through micro credit loans are less likely under current economic circumstances, and workers remittances worldwide will likely drop with many companies lying off employees. It may be recalled that Bangladesh is, after India, the second largest exporter of goods from South Asia to Canada.
Canada's primary imports from Bangladesh include ready-made garments, fish, bicycles, textile fabric and yarn, footwear and ceramics. The main Canadian exports to Bangladesh include iron and steel, vegetables, cereals, machinery, oil-seeds, electrical machinery and pharmaceutical products.
Bangladesh continues to experience a moderate rate of economic growth. However, the recent explosive growth in such sectors as services presents significant opportunities for Canadian investors.
- Canada and Bangladesh relations
- Bangladesh-Canada Bilateral Trade
- $3 billion in exports from Bangladesh to Canada by 2021
On trade and investment, the scenario has by now reached an enviable level. The bilateral trade between Canada and Bangladesh crossed one billion US dollars indespite economic recession and low-end Bangladeshi products, particularly ready-made garments. Canada's trade relationship with Bangladesh has grown in the last couple of years and is projected to grow steadily in the future. Of the total exportable items from Bangladesh to Canada, a duty-free market for the country since95 per cent is garment items.
Bangladesh's success in garment and textile exports should spread to other sectors in Canada. There are many goods that Bangladesh produces could be exported to Canada. Bangladesh can export porcelain or china, table and kitchenware. There is also heavy demand for jute and quality jute goods in Canada. Of late, agro-commodities, communication equipment, metals, pulp and paper are also being traded both the ways.
Canada's Trade with Bangladesh: It's time that the Canadian investors were informed about the congenial business environment that prevails in Bangladesh and that they can now invest in different profitable sectors. The Canadian investors can increasingly invest in Bangladesh in such promising sectors as power, energy, textile, garments, food processing and packaging, IT and services.
Bangladesh shows signs of political prudence and economic development. Its middle class is growing rapidly and several state-of- the-art sectors are developing.
With approximately million people, Bangladesh is one of the most populous democracies in the world and its middle class is million strong. The government is committed to further liberalize the investment regime.
There is a network of well-established Bangladeshi expatriates and immigrants in Canada. The knowledge of the English language is widespread in the country and the legal system is inspired by the British Common Law. Bangladesh should therefore be an attractive investment destination for the Canadian business people. Bangladesh economy has performed remarkably well despite the global economic crisis and the macroeconomic indicators are in good shape.
This relative stability helped put Bangladesh in the limelight. Bangladesh figures in a select group of countries that have emerged from the shocks of the global economic crisis with a decidedly positive growth outlook. Although, due to the commodity price crash, value of imports dropped slightly and capital machinery imports also declined indicating sluggishness in the manufacturing sector investment, the resilience of RMG and textiles sectors helped to prop up export receipts.Let's do the numbers on U.S. trade with Canada
The small drop in exports, coupled with record remittance, resulted in a swelling current account surplus, which has kept the local foreign exchange and taka market very liquid.
While this large liquidity overhang could have forced the taka to appreciate, judicious purchases by Bangladesh Bank to mop up excess liquidity has helped to keep the exchange rate of the taka broadly stable, and helped preserve external competitiveness of exporters. The real GDP is clocking around 6 per cent growth and the financial system has remained sound. The investment climate is also improving gradually fuelled by the global recovery, with signs of strengthened economic activities in the US, Canada and European countries.
Furthermore, the government has announced financial stimulus packages to boost certain priority sectors with special support for the industrial sector. The central bank has also taken measures like relaxing conditions for borrowing, lowering interest rates as well as widening the range of financial assets admissible as collateral to maintain adequate liquidity and credit flow to the markets. The government has also been taking significant steps to plug the growing power and energy shortages and develop infrastructure.
Steps such as private-public partnership will hopefully attract sufficient investments to lay the foundation for a stronger performance in FY Private investment from foreign sources is welcome in Bangladesh and there is no restriction on the amount of investment or equity shares. Suppliers of products and services for the following sectors are welcome in Bangladesh: The business people of both Canada and Bangladesh should better assess the development potential of their business in Bangladesh.
The prospective investors can also take the benefit of a number of international investment regimes available in Bangladesh. The Multilateral Investment Guarantee Agency of the World Bank group encourages the flow of foreign direct investment FDI to, and among, developing member countries by providing guarantees to foreign investors against loss caused by non-commercial risks.
MIGA's guarantee protects investors against losses arising from the risks of currency transfer, expropriation and war and civil disturbances. MIGA ensures new investment, privatization and financial restructuring. The ICSID is mainly for the settlement of investment disputes between states and nationals of different states.
ICSID seeks to encourage greater flows of international investment by providing facilities for the conciliation and arbitration of disputes between governments and foreign investors. OPIC is the most important US government agency which is in a position to promote greater investment interest in countries like Bangladesh by providing loan financing and investment insurance to North American investors. Hence, a loss of entitlement of duty-free market access would imply facing the applicable MFN tariff rates.
Import Tariffs in the Canadian Market Table 4: Analysis of top export products reveals that Bangladesh is the second most important import source after China in the Canadian market Table 4.
$3 billion in exports from Bangladesh to Canada by | Dhaka Tribune
This would make it difficult for local exporters to maintain their competitiveness. The competition would be fiercer when Bangladesh will not have LDC status. However, the preference margin would gradually reduce due to slow reduction of MFN rates particularly of manufactured products, which partly reduce the competitive advantage of countries enjoying duty-free market access facility.
Hence, it would be difficult to maintain the growth within its existing export items. Since Bangladesh is likely to be adversely affected while it loses its LDC status, it needs to take precautionary measures and should be prepared. Bangladesh government should undertake a detailed product-wise analysis to appreciate the possible adverse impact on export due to loss of duty-free market access facility in the Canadian market.
With the understanding on the nature and extent of possible impact on bilateral trade, Bangladesh needs to identify strategies to accommodate the situation. First, Bangladesh should identify a list of products where it needs preferential scheme most, followed by another list of products where the preferential scheme is also important.
Second, Bangladesh needs to address these issues with the Canadian government and request for a favorable preferential market access scheme. Third, Bangladesh needs to identify products where MFN rates are zero and would not have any implications in the tariff rates after its graduation from LDCs. Since trade potentials for such products are found to be high, putting an emphasis on enhancing their export capacities would be equally important.