Trade experts and economists suggested on Thursday that the government form a central committee, comprising specialists from private and public sectors, to devise ways for weathering challenges in the post-LDC (least developed country) era, starting from 2026.
Some of them opined in favour of allowing foreign direct investment (FDI) in the textile sector, especially in its backward linkage industries, to become more competitive in the global market.
The suggestions came from an online discussion - "Moving out from the LDC group: Strategies for graduation with momentum" - organised by the Centre for Policy Dialogue (CPD) on Thursday.
CPD Chair Professor Rehman Sobhan presided over the programme, where Distinguished Fellow of the think-tank Professor Mustafizur Rahman presented a keynote.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Dr Rubana Huq expressed her dismay over Bangladesh's preparation for facing the future challenges, and questioned whether the country was ready to face these or not.
"Who (which public body) is working on it? Is there any central body? Do we have any concrete effort to tackle the forthcoming challenges?"
She demanded formation of a central committee immediately to deal with the challenges in trade and economic relations after the LDC graduation.
The BGMEA president urged the government for allowing FDI in the textile sector, especially in its backward linkage industries, for upgrading the country's competitiveness in international trade.
She emphasised more FDI in the backward linkage, including for man-made fibre production in the country, as Bangladesh's textile sector is heavily dependent on cotton-made fibre, imported from abroad.
Professor Mustafizur Rahman said the government should immediately form a central negotiation committee, comprising private sector think-tank representatives, researchers, and trade experts, to deal with any bilateral or multilateral discussion on trade and economic benefit.
"There is a lack of coordination among the public agencies and ministries. If efforts from both the private and the public sectors are not ensured, the future trade deals like free-trade agreements (FTAs) and preferential trade agreements (PTAs) will be in disarray."
Prof Mustafiz said the heavily-protected trade in Bangladesh would be a major hurdle for (signing) the possible FTAs and PTAs, as the counterparts would not show interest with the country's higher tariff rates.
The government has to allow making independent trade policies, rules and regulations for upgrading its trade competitiveness, he added.
"We have to take benefits as well as offer facilities to our trade partners."
The CPD fellow noted that Bangladesh's heavy dependency on RMG is somehow acceptable, as the size of global textile market is much larger than other products.
"But after the LDC graduation, (dependency on) only one product will be challenging for us. We must diversify the export basket for sustaining in the international trade arena."
Focusing on FTAs and PTAs, Prof Mustafiz said: "After the graduation in 2026, Bangladesh will have to pay 15 per cent tax for its exports to the US market. Is Bangladesh ready to face the sudden changes in its competitive trade in that market?"
"In addition, if Vietnam gets duty-free quota-free (DFQF) market access to the US through the recently signed Trans-Pacific Partnership (TPP) deal, how will Bangladesh face its East-Asian competitor?"
The CPD fellow suggested the government to take a comprehensive stand with other LDC-graduating countries in the next ministerial World Trade Orgnaisation (WTO) conference in Geneva in November for getting trade benefits for some more times after 2026.
He also opined for negotiation with the WTO for getting TRIPS benefit, which will be helpful for local pharmaceutical industry.
A Matin Chowdhury, Managing Director of Malek Spinning Mills Ltd and Former Chairman of the Bangladesh Textile Mills Association (BTMA), said Bangladesh should allow FDI in the textile sector for making the country globally competitive.
"Bangladesh is poor in terms of the backward linkage products of the textile sector. For this reason, we should attract FDI through joint-venture."
Mr Chowdhury also emphasised upgrading the country's education system for developing manpower with higher productivity.
As the chief guest of the programme, State Minister for Foreign Affairs Shahriar Alam said Bangladesh proved its capacity through higher RMG export to the US market even after withdrawing trade benefits there.
He said as a prospective developing country Bangladesh's image will improve, credit rating will be upgraded, and scopes of taking external loans, including the commercial ones, will enhance.
Mr Alam said Bangladesh is working to sign FTAs and PTAs with bilateral and sub-regional blocs for tackling the future challenges.
Professor Rehman Sobhan said he did not have a clear picture on the future challenges after the LDC graduation.
"Three years have already passed since the last review on the LDC graduation in 2018 by the UN CDP. But has Bangladesh taken any preparation?"
"We have to compete with India, China and Vietnam after the graduation. Exactly what preparations have we taken?" he added.