Bangladesh and Bhutan initiated negotiations for free trade and transit under bilateral arrangements to augment paltry business transactions between the two countries.
Meanwhile, a four-nation sub-regional connectivity deal has been stalled for not being ratified by the upper chamber of Bhutan's parliament.
Sources said the two neighbours opted for negotiation towards signing a preferential trade agreement (PTA) or free-trade agreement (FTA) to tap the potential of boosting the two-way trade.
Both the countries agreed to start the talks in their 6th commerce secretary- level bilateral meeting held on December 21-22 in Cox's Bazar.
Commerce secretary Shubhashish Bose led the 11-member host side while economic affairs secretary of Bhutan Dasho Yeshi Wangdi led their delegation.
Following proposals from the Bangladesh side, the counterpart said a study on the PTA is under way that would require some more time to shape up the deal.
Talking to the FE Saturday, Mohammad Ehteshamul Hoque, first secretary for customs modernisation and international affairs, said Bangladesh offers duty-free market access for some 18 Bhutanese products unilaterally.
"We would be able to enjoy duty-free facility on import of some products after PTA or FTA is signed between the countries," said Mr Hoque, who attended the meeting.
However, Bangladesh declined to allow duty-free access for additional 16 products as proposed by Bhutan at the bilateral trade talks, he said.
Bangladesh as a WTO (World Trade Organisation) member has the responsibility to act as per WTO spirit. But, Bhutan is a non-member country and has no obligation to comply with the WTO rules, he pointed out.
Dhaka is not always encouraged to provide preferential market access without any appropriate trading platform, he said.
He mentioned that it was agreed at the meeting to allow duty-free access of limestone powder from Bhutan.
"It was a long-cherished demand of Bhutan. The National Board of Revenue (NBR) will issue a Statutory Regulatory Order (SRO) in this regard shortly," he said.
Despite excellent bilateral relations, trade volume between the two countries is still low. The total annual trade value between the two countries remains about US$ 36 million, with trade limited to only a few products that deserve to be enlarged.
The Bhutanese delegation highlighted the importance of finalising the Agreement on Transit and Standard Operating Procedure (SOP) for Memorandum of Understanding (MoU) on the 'Use of Inland Waterways' within the shortest possible time.
They focused on those as crucial to furthering bilateral trade and transit facilities between the two countries.
If Bangladesh hosted a joint technical committee (JTC) it could conduct field visit to indentify water routes and port facilities and Bangladesh's experience and expertise in such area, the Bhutanese team of negotiators said.
In the meeting, the visiting side proposed specific plan of actions to implement MoU between Bangladesh Standard and Testing Institution (BSTI) and Bhutan Standards Bureau (BSB) for standardisation, conformity assessment and exemption of taxes.
Bangladesh suggested that Bhutan forward the proposals through the diplomatic channel for consideration and implementation.
The proposed plan of actions could be expanded to include accreditation and testing involving the Bangladesh accreditation board (BAB) and its accredited private testing institutions in Bangladesh.
Both the sides also expressed hope for resolving pending issues like bank guarantee and clause on entry and validity of the agreement for finalizing transit agreement and related draft protocol to the transit agreement.
On the unfinished Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement (BBIN-MVA), the Bhutanese side once again conveyed its negative position as its Upper House of Parliament declined to ratify it.
Regarding agreement on avoidance of double taxation and prevention of fiscal evasion in respect of taxes on income, the Bhutanese delegation said it was also yet to be ratified by its upper house of parliament although Bangladesh side informed about its full preparedness on the agreement.
The two sides also discussed allowing longer time for business travelers from Bangladesh, making Tamabil land customs station more vibrant, export of quartzite from Bhutan, exchange of information relating to bilateral trade and investment, cooperation between trade associations, enhancing cooperation in tourism sector and the like.
