New Delhi, Dec 1 (NationPress) Bangladesh is encountering significant challenges in sustaining its trade relationships with the world's leading economies, primarily due to policy missteps by the interim government led by Muhammad Yunus. Disruptions in business operations and ongoing domestic economic crises have heightened these trade vulnerabilities, as noted in an article published by the Dhaka-based Daily Sun.

The loss of Bangladesh's status as a least developed country (LDC) has increased its exposure, as it will no longer qualify for international trade benefits typically extended to poorer nations.

Initially, following the political transition in July, Bangladesh seemed to be bolstering its ties with China, its largest trading partner. However, after securing trade agreements with the United States, China has adopted a more cautious stance regarding trade with Bangladesh, the article indicates.

While China has assured that it would uphold tariff advantages post-Bangladesh's LDC graduation, no written commitments have been provided.

The article further emphasizes that the interim government has found it difficult to maintain robust trade relations with India, Bangladesh's second-largest trading partner.

Since assuming power, the government has faced conflicts over various matters, including trade restrictions on specific goods transported via land routes, which have contributed to a decrease in bilateral trade with India.

This situation has led Bangladesh to incur higher costs for essential imports, such as rice, which it previously procured from India, and now has to source from Singapore.

Bangladesh is also grappling with challenges from Japan, as Tokyo is seeking trade concessions similar to those extended to the United States, complicating the potential signing of an Economic Partnership Agreement (EPA). Japan is pushing for reductions in high import tariffs on vehicles, citing the US agreement as a benchmark.

The article notes that the European Union (EU), Bangladesh's most reliable trade partner, has also expressed concerns. To gain tariff benefits under a reciprocal trade agreement with the United States, Bangladesh has committed to increasing imports and making significant purchases, including Boeing aircraft and LNG.

This has escalated pressure from Europe, where Bangladesh had previously pledged to acquire 10 Airbus planes from France.

The EU is now insisting that Bangladesh honor its prior commitments, warning that failure to do so could jeopardize GSP Plus privileges after LDC graduation. Reports suggest that Germany’s ambassador recently issued an implicit warning at a DICAB event.

Experts believe that the cumulative pressures and stipulations from significant trading partners and development allies pose serious risks to Bangladesh’s international trade.

The article quotes MK Muzeri, former director general of the Bangladesh Institute of Development Studies (BIDS), stating that the interim government has made several erroneous decisions that not only threaten trade but could also impose burdens on the next elected government.

The former Chief Economist of Bangladesh Bank remarked, “The understanding forged with the United States will long-term impact Bangladesh’s trade. Other nations may start imposing conditions to attain similar benefits. A substantial portion of Bangladesh’s export revenue is derived from Europe.

Should issues arise with Airbus purchases, European countries will naturally respond. The interim government should not have hastily entered into these long-term agreements without consulting businesses and entrepreneurs,” he added.