DHAKA: Business leaders from Thailand have agreed on plans to start talks over a free-trade agreement (FTA) with Bangladesh, which could facilitate more Thai investment in the country.
But they said the proposal that Thailand open up a "free quota" for Bangladesh's goods was unlikely to be dealt with shortly, as the Thai government should consider thoroughly whether those tariff-free products from Bangladesh would hurt local Thai producers and farmers.
During the Thailand-Bangladesh Joint Trade Committee meeting last week, Bangladesh proposed that Thailand cut import tariffs on 36 major export items, mostly in the textile and garment sectors, which Bangladesh is keen on, as well as some agriculture products, said Commerce Minister Apiradi Tantraporn.
She said Bangladesh required that Thailand's tariff cuts be the same as those the United Nations grants to less-developed countries.
"The request for 0% tariffs from Bangladesh is also intended to help reduce its trade deficit as well," Ms Apiradi said.
Bangladesh is Thailand's third-biggest trade partner among South Asian countries after India and Pakistan, with annual two-way trade worth US$1 billion (33.2 billion baht) last year, up 10.4% from the previous year.
But Thailand has enjoyed a huge trade surplus, since its exports to Bangladesh are worth around $940 million. Major exports include plastic pellets, chemical products, cement, textiles, steel, tapioca products and cosmetics.
Thailand, meanwhile, imported a small quantity of garments, fertiliser and livestock from Bangladesh.
Ms Apiradi said Bangladesh wants the free import tariff regime to help bridge the annual trade deficit gap.
Phairush Bunrapachaisri, vice-chairman of the Thai Chamber of Commerce, said the private sector wants the government to thoroughly deliberate the zero import tariff issue before making any commitments to Bangladesh.
He said free imports could mean an influx of specific goods from Bangladesh, particularly garments, that could hurt Thailand's local garment and textile sectors, as they have suffered from high domestic labour costs, forcing many companies to relocate to neighbouring countries.
The zero import tariff could also bring in some agricultural products from Bangladesh that would hurt Thai farmers, Mr Phairush said.
But the Thai business sector as a whole welcomes the idea of cooperating on investment with Bangladesh because Thai investors are interested in using Bangladesh as a major investment hub to produce and distribute goods and services in the region.