IN the arena of external trade, India and China are two largest trading partners of Bangladesh. The other important regional trading partners include Pakistan, Sri Lanka, Myanmar and Malaysia. However, in the regional context, as a member of the South Asian Association for Regional Cooperation (Saarc), Bangladesh is also a member of the Saarc trade body South Asia Free Trade Arrangement (Safta). But so far Bangladesh, like any other member of this regional trade form, has not been able to reap desired benefit from Safta.

Though in the international setting regional economic forums are proving to be very successful, in South Asia the scenario is not the same. Regional cooperation in the sphere of economy and trade is yet to get underway in this part of the world. But notwithstanding any marked progress in multilateral cooperation in the area of trade and commerce, the same like the proverbial time and tide will not wait for any one. Nations, for their survival and continued growth, must carry out trade and commerce at whatever form or level it is possible. Traditionally, trade among nations is transacted in its oldest form at the bilateral level. Until now, despite the existence of so many regional economic blocs, bilateral trade still dominates the scene. Even in the South Asian region, the major players like India, to all appearances, are tilted more towards carrying out bilateral trade and commerce than operating at the multilateral level. That might be one of the reasons why the prospect of regional trade is facing so many hurdles to flourish in South Asia. Bangladesh, being a least developed country, is at a disadvantage in the sphere of trade and commerce in the region. So, to make the most of the commercial transactions with different countries in the region, especially with India, at the existing bilateral level, Bangladesh needs to look for ways to make it more gainful. The argument will not be different even in the case of our business transactions with another Asian giant China. So, far as bilateral trade is concerned, Bangladesh carries out its largest volume of transactions with China. Naturally, Bangladesh should find ways and means to reap the highest benefit from the two-way trade it carries out also with China. In a similar fashion, it should try to develop the quality of its two-way trade with other major partners within the region and beyond. Pakistan and Sri Lanka in South Asia, the next-door South East Asian neighbour Myanmar and another Southeast Asian partner Malaysia are the countries with which Bangladesh needs to devise ways to carry out two-way commercial transactions so that both the sides in the deals are benefited in the deal in terms of the volumes of the trade transacted under more relaxed conditions.

What options are open to make bilateral trade more profitable between Bangladesh and its South Asian, Southeast Asian and Far Eastern partners?

The commerce ministry at a meeting held this month spoke in favour of strengthening bilateral trade transactions with China and India under free trade agreements. The priority of China and India lies in the fact that overwhelmingly the largest volumes of bilateral trade are transacted with these two countries. That apart, the argument is the same for other regional trade partners such as Pakistan and Sri Lanka as well as other Asian partners including Myanmar and Malaysia.

The spirit of developing free trade agreement at the bilateral level with Bangladesh's major business partners is that both sides should relax the various trade barriers that generally exist between the nations. The bottlenecks include both trade and non-tariff barriers. There is also the list of items falling under the sensitive category, the length of which should be shortened at the convenience of both the sides.

However, considering its position as a least developed country (LDC), Bangladesh can also claim a favoured nation status in carrying out trade negotiations with these developing economies as its bilateral partners. For what cannot be lost sight of all the while is that Bangladesh will constantly run the risk of being at the receiving end while transacting trade with economically stronger partners.

Under free trade agreements, the countries possessing stronger economic muscles always fare better at the end of the business transactions. This is true both in the areas of multilateral and bilateral deals. However, at the multilateral level the rules of the game are more elaborate and the checks and balances are many. Moreover, under a multilateral dispensation, the weaker partners can make a common cause in the areas where they are at a comparative disadvantage vis-à-vis their stronger partners. So, by its very nature the LDCs can expect a better deal under multilateral arrangements regionally as well as internationally. But such benefits are not guaranteed under bilateral trade deals. What is worse, trade pacts at the bilateral level are also highly susceptible to changes in the political relations between the nations entering bilateral trade deals. For unlike in the case of multilateral trade relations, there is hardly any scope for a third party's participation in the matter to resolve the disputes amicably. So, in such cases of misunderstanding between partners in a bilateral setting, chances are that the weaker partner will always remain at risk. But the brighter side of the bilateral deals is if the political relationship between the partners concerned is very warm, the weaker party in the deal is poised to draw the greatest benefits from such transactions.

The commerce ministry people who threw their weight behind the argument in support of bilateral trade and its benefit are certainly alert to these hazards lurking in the arena of bilateral trade pacts between countries. But this is also not meant to say that Bangladesh will have to sit idle and keep its doors closed to any kind of commercial transactions with its bilateral trade partners for fear of being the losers in the deals. In fact, so far Bangladesh has been doing fairly well in its trade relations with different countries within the South Asian region and beyond, especially with another Asian giant China. However, it has also to be admitted on this score that good political relation with the bilateral partners concerned has played a major role in these transactions. But political relations and economic muscles aside, business acumen earned through experience is the ultimate safeguard against any fall on the slippery grounds of commercial transactions. For an economically weaker operator like Bangladesh, the government people sitting at the negotiation table with the bigger and stronger partners will be required to demonstrate the required skill and acumen to turn the deals to their favour.

When one is considering Bangladesh's history of trade with economic giants like China and India, the question of balance of trade will naturally occupy the centre stage during any trade talks.

In the last fiscal year, Bangladesh imported goods worth US$2.30 billion from China, but exported to that country only US$93 million worth of its own commodities. During the same period, it imported goods worth US$2.10 billion from India, but exported its own products valued US$289.41 million to that country. Bangladesh, in both the cases of transactions, is at a disadvantage. To reduce this huge trade gap, Bangladesh will have to increase its export to those countries. Therefore, the negotiators from Bangladesh will also be required to bring these issues to the fore while going for free trade pacts with these global giants including other partners of the region and beyond.