International Trade and Trade Policy Challenges in Bangladesh

Abstract

Foreign trade plays a prominent role in achieving accelerated economic growth and development of a country whereas the growth of export can enhance the import capacity of a country which in turn increases output. Bangladesh, which was once called a “Bottomless Basket", has now been recognized as a "Basket full of Wonders" and the "Development Miracle" in the world. Despite many hurdles from its independence, the country has achieved unprecedented success in different areas including international
trade. Today the "Made in Bangladesh" brand is a name of trust and confidence in the global fashion industry. In case of sourcing of apparels, the first choice of leading international brands is Bangladesh’s apparels. From the overall analysis of the trade performance over the years, the observation is that the gap between export earnings and import payments is frighteningly widening for Bangladesh. Against this backdrop, the study identifies the overall challenges related to international trade and trade
policies which disrupt the growth of trade in Bangladesh. In doing so, particularly, the impact of on-going global issues on international trade; excessive dependence on a few export items and markets; sector-specific major challenges and needs assessment; border and behind-the-border trade barriers; different non-tariff barriers; lack of synchronization among the trade policies; impediments in inclusion of women entrepreneurs and cottage, micro, small and medium enterprises (CMSMEs) in formal trade; and challenges of Bangladesh’s graduation from LDC etc. have been addressed. Both qualitative and quantitative data analyses have been used while primary data has been collected through interviews from different stakeholders to address the challenges. To encounter these challenges, the study makes some recommendations such as utmost importance has been given on export diversification; major sector-wise recommendations; adequate infrastructural development; removal of NTBs; compliance issues; coherence in policies; introduction of One-Stop Service (OSS) facility; and effective negotiation for bilateral PTA, FTA etc. to facilitate trade, strengthen the performance of the Bangladesh’s export sectors, and above all, to improve the country’s overall trade balance.