Trade Relations with SAARC Countries and Trade Policies of Bangladesh

Abstract

This paper attempts to provide a synopsis of Bangladesh trade with the South Asian Association for Regional Cooperation (SAARC) countries and of its policies regarding bilateral and global trade. The common structure of the economies and the same intensive price competitiveness could lead to a great deal of formal trade between Bangladesh and the SAARC countries, but this potential is yet to be realised. Bangladesh suffers from a huge trade deficit with India. This paper will lay special emphasis on the trade relations with India and the proposed South Asian Growth Quadrangle consisting of seven north- eastern states of India, Bangladesh, Nepal and Bhutan. It will examine the impact of GDP and of the exchange rate and its variability on the export and import growth of Bangladesh. It will also examine the trade policies of Bangladesh with special reference to both nominal and effective tariff levels, and non-tariff barriers that hinder the growth of Bangladesh global trade with its neighbouring countries.