DHAKA: Bangladesh has signed a memorandum of understanding (MoU) to buy 1 million tonnes of Thai rice a year, and agreed to start talks with Thailand on forming a bilateral free trade agreement (FTA), which would double trade value to US$2 billion (66.5 billion baht) by 2021.
Speaking at a Thai-Bangladesh Joint-Trade Committee (JTC) meeting, Commerce Minister Apiradi Tantraporn said the countries had agreed to hold negotiations that could lead to an FTA within the next few years.
On the sidelines of the meeting, Bangladeshi Food Minister Qamrul Islam also signed an MoU with Ms Apiradi for Bangladesh to buy 1 million tonnes of Thai rice a year in government-to-government (G-to-G) contracts to secure its food staple.
"Under the MoU, Thailand agrees to sell rice through a G-to-G deal of up to 1 million tonnes of all kinds of Thai rice annually to Bangladesh and Thailand is happy to be the supplier to Bangladesh," Ms Apiradi said.
However, a deal for Bangladesh to buy an additional 200,000 tonnes of Thai rice has yet to be sealed as the two countries are still negotiating a price.
The proposed FTA is likely to cover a wide range of fields including agriculture, food-processing, fishery, construction, energy and tourism.
With a population of 160 million, Bangladesh has had annual GDP growth averaging 6% a year over the past 10 years.
It is Thailand's third-biggest trade partner among South Asian countries after India and Pakistan, with annual two-way trade with Thailand worth US$1 billion last year, up 10.4% from the previous year.
Thai exports to Bangladesh were worth around US$940 million. Major exports are plastic pellets, chemical products, cement, textiles, steel, tapioca products and cosmetics.
Thailand, meanwhile, imported covered garments, fertiliser and livestock from Bangladesh.
Bangladesh is not only a potential trade partner, but due to it sharing a boundary with India, it is also seen as a gateway to the Middle East and African countries.