Trade and politics-which comes first?

Shamsul Huq Zahid





One may not find anything new in all the exhortations of the business leaders at a daylong conference on 'Bangladesh-India Economic Relations', jointly organised by the apex chambers of the two countries in Dhaka Monday, to improve trade relations between the two neighbours.




Participants belonging to both sides stuck to their old guns and yet they wanted the economic cooperation to grow.




However, the Tipaimukh dam issue raised by President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Annisul Huq and the statement of Indian High Commission in Bangladesh Pinak Ranjan Chakravarty in response to the local businesses' suggestion to ease visa procedures, apparently, added some political flavour to the proceedings of the conference.




Bangladesh entrepreneurs and Commerce Minister Faruk Khan taking part in the conference sessions, as usual, among others, highlighted the need for addressing the issue of non-tariff barriers (NTBs) by the Indian authorities. Their counterparts, however, in their deliberations, deliberately or otherwise, bypassed the issue and hammered on the need for increasing physical connectivity, meaning transit or trans-shipment facility and signing of a bilateral free trade agreement (FTA) to promote trade and economic cooperation.




The issue of NTBs erected by the Indian authorities to restrict imports from Bangladesh has become a major irritant as far as the Bangladesh- India trade is concerned. According to a report published in the FE Tuesday, an inter-ministerial meeting, attended by the commerce minister and chaired by the foreign minister, has recently formed a core group to examine in details the NTBs and recommend measures to deal with the same.




The meeting was told that India, instead of dismantling NTBs in the light of South Asia Free Trade Agreement (SAFTA) and WTO trade provisions applicable to the least developed countries (LDCs), was erecting stiffer NTBs to exports from Bangladesh. When an Indian business leader or a diplomat pleads for greater physical connectivity for bilateral trade promotion, he or she should not ignore the hassles that the Bangladeshi exporters are subjected to, in the form of NTBs.




Statistics suggest that Bangladesh's export to India has increased albeit at a snail's pace in recent years when Indian export to Bangladesh has assumed far greater speed, raising the annual trade deficit to over $3.0 billion in 2007-08.




The Indian NTBs, many Bangladeshi entrepreneurs believe, are unnecessary ones in view of the very limited export-basket that Bangladesh has. Even without the NTBs, Bangladesh is unlikely to make any significant entry into the India market.




There is no denying that in addition to structural barriers, there are a few perceptional barriers to a balanced growth of trade between the two countries and NTBs belong to the latter.




Dr. Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI), the co-organiser of the Monday's conference, has suggested a pragmatic approach to the bilateral trade issue.




He has admitted that Bangladesh's trade deficit with India is neither acceptable nor sustainable. And to reduce the deficit, he said, India could make strategic investments in Bangladesh and export goods and services to India and, in return, Bangladeshis would get jobs.




But the Bangladesh-India trade conference, organized with the objective of promoting bilateral economic relations, has come at a time when the Indian plan to construct the Tipaimukh dam on the Barak river, honestly speaking, has given rise to public resentment in Bangladesh.




So, the reason behind the FBCCI president's appeal to businesses of both Bangladesh and India to be vocal and stand shoulder to shoulder to protect their common interests if the issue like Tipaimukh dam comes to the fore is not difficult to fathom. He tried to covey the message that such issues having political dimension do leave a damaging impact on bilateral trade and economic cooperation and it was the responsibility of the businesses to work together for the early solution of the same.




Trade relations can hardly work in isolation. Political relations between two countries do always play an important role in enhancing their trade and economic cooperation. Mutual trust, not suspicion, does provide the real boost to both political and economic relations between two countries, particularly when they are next-door neighbours.




So, politicians, who, according to the Bangladesh commerce minister, are the 'biggest barriers' to regional cooperation, of both Bangladesh and India, should try sincerely to remove the irritants, political or otherwise, first to create an environment conducive to growth of bilateral trade and economic cooperation.




But while making relation- boosting efforts, the politicians at the helm of state affairs need to be vigilant so that their subordinates cannot torpedo their good initiatives by making provocative utterances while on duty either at home or abroad.