Pakistan, Bangladesh on Path to Joint Economic Ventures

Establish Pakistan-Bangladesh Joint Business Council

Mon Jan 13 2025
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ISLAMABAD: Trade ties between Pakistan and once-belligerent Bangladesh are set to scale new heights as the business organisations of both countries—Pakistan Federation of Chambers of Commerce and Industry (FPCCI) and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)—laid foundation of a joint commerce venture, Pakistan-Bangladesh Joint Business Council.

The Memorandum of Understanding (MoU) for the establishment of the joint business council was signed by FPCCI President Atif Ikram Sheikh and FBCCI Administrator Muhammad Hafizur Rahman in Dhaka on Monday.

Pakistani High Commissioner to Bangladesh Syed Ahmed Maroof was also present.

The joint business body will serve as a platform for the exchange of trade and investment information, the organisation of business delegations, and the participation of businesses in trade exhibitions in both countries.

It will also oversee other initiatives aimed at promoting economic cooperation and unlocking the potential for mutual growth.

Talking on the occasion, Maroof termed the initiative a step forward to facilitate businesses on both sides, encourage collaboration, and enhance Pakistan-Bangladesh bilateral trade ties.

Historical Residues

Trade relations between the two countries witnessed more downs than ups but evolved significantly over time. Since the partition of Pakistan and the emergence of new State on the global map in 1971, the two countries worked, albeit at a snail pace, towards augmenting their bilateral economic ties.

In 1980s, sincere efforts were made from both the sides to normalise diplomatic as well as trade relations. But they failed to yield any fruitful result, mainly owing to the recent history marked by huge mistrust and extreme political differences.

The 1990s, nevertheless, proved to be a bit good for trade ties as both nations recognised the mutual benefits of economic cooperation. This period marked the establishment of various trade agreements, but the trade volume was still relatively low. Pakistan mainly exported textiles, chemicals, and machinery to Bangladesh, while Bangladesh exported jute, tea, and agricultural products to Pakistan.

During the 1980s and 1990s, total trade between Pakistan and Bangladesh was in the range of $50 million to $100 million annually.

The early 2000s proved to be turning point for the trade of the two countries. They signed trade agreements, aimed at simplifying and reducing tariffs and boosting trade volume.

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Outlay of the trade volume between the two countries surpassed $200 million annually by the mid-2000s.

In 2006, both countries agreed to setup Pakistan-Bangladesh Joint Economic Commission, a platform finding way to facilitate discussions on trade and investment opportunities, with a special focus on agriculture, energy, and transport.

Trade between Pakistan and Bangladesh saw a significant uptick in the 2010s. Both nations made strategic efforts to diversify their trade relations. Pakistan exported a variety of products to Bangladesh, including textiles, rice, cement, and chemicals. In return, Bangladesh increased its exports of ready-made garments, jute, and agricultural products like fish and fruits to Pakistan.

In 2013, the two countries signed an MoU on cooperation in the areas of trade and investment, aiming to improve market access and facilitate business exchanges. FPCCI and the FBCCI also became active in organising business events to connect businesses from both countries.

Resultantly, by 2013, trade crossed the $1 billion mark annually. In the coming years, the trade quantum kept on increasing: in 2015 the bilateral trade jumped to $1.03 billion, while in 2017-2018 the trade volume hovered around $1.2 billion to $1.3 billion annually.

In 2021-2022: The trade volume was reported at approximately $1.6 billion, with both countries working to expand their trade through the establishment of new trade councils and agreements.

Challenges:

Issues related to tariff barriers, lack of direct shipping routes, and occasional political tensions are factors that at times hit a snag, hindering progress not only in diplomatic relations but also in economic ties.

However, commitment and determination to overcome these obstacles through constant people-to-people contact, expanding trade agreements, improving logistical connectivity, and fostering stronger diplomatic ties, can help allow the history of brotherhood to repeat itself.

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