Dhaka, Jakarta to sign counter trade agreement this year |
Star Business Report
Bangladesh and Indonesia are going to sign a counter trade agreement (CTA) this year to initiate bilateral trade under a new arrangement.
"We are expecting to sign the CTA with Indonesia by October-November this year to boost bilateral trade, and export from Bangladesh in particular," a high official in the commerce ministry said yesterday.
Export-import activities under the agreement will start soon after its signing. This will be the first deal of its kind for Dhaka, official sources said.
Officials think that the export volume of Bangladesh would increase substantially once business gets started under the proposed agreement. Currently, Bangladesh has a huge trade deficit with Indonesia.
Meanwhile, significant development has taken place since the two countries signed a Memorandum of Understanding (MoU) in this connection on June 19 last.
Dhaka and Jakarta in the meantime exchanged their lists of products under the proposed trade arrangement. Besides, the two governments will nominate a bank from both the country by the next month for making transactions under CTA.
Under the new arrangement, payments for business transactions will be made after a stipulated period of time instead of instant settlement.
Accounts for two-way business transactions will be maintained by designated banks in respective countries. At the end of the stipulated period, accounts will be settled by paying the balance amount only, sources said.
Policymakers of both the countries are considering to provide additional banking facilities to the businessmen operating under the proposed arrangement, sources said.
Bangladesh sent a list of 25 items to Indonesia while Indonesia gave a list of 13 items for the proposed agreement.
The major items included in the Bangladesh list are--- raw jute, jute yarn and twine, jute carpet, leather and leather goods, textile fabrics, knitwear, woven garments, acrylic yarn, chemical fertiliser, tobacco, hardboard and particle board, electronic wires and cables, handicrafts, printed materials, footwear, pharmaceuticals, specialised textiles, frozen fish, melamine and porcelain tableware.
On the other hand, the Indonesian list includes fabricated construction materials, clinkers, plywood and timber, pulp and paper, tyres, textile and textile products, coal, petrochemicals, denim, fertiliser and building materials.
Sources in the commerce ministry said the item lists will be finalised soon on the basis of priority and mutual understanding.
Bangladesh exported commodities worth US 5.60 million dollars to Indonesia against imports of 173.62 million dollars during the fiscal 2001-2002 with a trade deficit of 162.02 million dollars.
The deficit has grown steadily to 116.43 million in 1997-98, 65.51 million dollars in 1995-96 and 57.31 million dollars in fiscal 1994-95.
Bangladesh exports jute, jute goods, leather and ready-made garments to Indonesia and imports mineral products, plastic and plastic articles, base metals, vegetable products, chemicals, machinery, article of stone and plaster cement.