CEPA with Bangladesh can be a template for enhancing trade in South Asia: Suresh Prabhu

Sep 28, 2018

 

NEW DELHI, 28 September 2018. Union Commerce and Industry Minister, Mr. Suresh Prabhu, said here today that India and Bangladesh have proposed early conclusion of a Compressive Economic Cooperation Agreement (CEPA) to boost bilateral trade and investment and set an example for giving a fillip to regional trade in South Asia.

 

Speaking at the launch of The World  Bank Group's Regional Trade Report at Federation House, on return from his Bangladesh visit, Mr. Prabhu said that India and Bangladesh have agreed to upgrade trade logistics for seamless movement of cargo. In the same spirit, he said, India would be willing to engage with its South Asian neighbours to reap the advantages emanating from similar agro-climatic conditions, topography and crop cultivation.

 

He urged the World Bank to explore the potential offered by services trade in the region. On his part, he said, he had invited the Bangladesh Commerce Minister and senior officials next month to identify the opportunities of investment from India to Bangladesh.

 

Presenting a snapshot of the Regional Trade Report, Dr. Sanjay Kathuria, Lead Economist and Coordinator, South Asia Regional Integration, The World Bank Group, said regional cooperation can lay open to India the potential to more than triple its trade with South Asia from the current level of US$ 19.1 billion to US$ 62.4 billion.

 

He said that in order to realise the benefits of proximity, addressing regional trade barriers was pivotal. Average tariffs on South Asia are double the world average and there was a lack of awareness among exporters regarding the partner country's regulations and standards. This called for a proactive approach, led by India, to address information asymmetries and accelerate mutual recognition of standards.

   

Dr. Kathuria said that India  could play a lead role in making SAFTA effective, create awareness, building capacity of partner countries to remove the 'noise' related to non-tariff measures, expand and accelerate the connectivity agenda with neighbours, take new initiatives and scale up existing trust-building activities through people-to-people contact.

 

The report suggests an eight-point South Asia trade integration strategy that includes the following:

•       Precisely articulating the trade strategy, with timelines for reforms of all border taxes, communicated clearly and transparently to stakeholders
•       Phasing in trade liberalization in sectors where there are concerns about large job displacement
•       Implementing a strategy to diversify sources of tax revenue that would reduce the often substantial dependence on trade taxes
•      Focusing on critical reforms that would help the economy and the private sector take advantage of trade liberalization, including improving trade facilitation, attracting high-quality FDI, and addressing key issues that constrain the ease of doing business
•       Negotiating enhanced market access within South Asia and in selected critical markets, especially in East Asia, which are underrepresented in the export basket of South Asian countries
•      Strengthening safety nets and training among those workers whose jobs are affected
•      Improving the links among education, training, and the job market to supply better skills to the sectors that gain from trade reform
•      Defining a limited fiscal package with clear and transparent criteria for the firms or sectors that will be adversely affected by trade reforms

Among those who addressed the launch event and participated in a panel discussion were: Dr. Junaid Kamal Ahmad, Country Director for India, The World Bank Group; Ms Manuela Francisco, Practice Manager, South Asia, Macroeconomics, Trade and Investment Global Practice, The World Bank Group; Mr. R V Kanoria, Past President, FICCI and Chairman, FICCI Committee on Trade Policy;  Dr Harsha Vardhana Singh, former Deputy Director General, World Trade Organization; Dr Amita Batra, Professor-South Asian Studies, Jawaharlal Nehru University; Mr Julian Michael Bevis, Senior Director, Group Relations-South Asia, The Maersk Group; Dr Pritam Banerjee, Asian Development Bank - India Resident Mission; and Mr. Dilip Chenoy, Secretary General, FICCI and Ms. Indrani Bagchi, Diplomatic Editor, The Times of India.