Bangladesh seeks tariff waiver on jute exports to Pakistan as trade talks revive after two decades
Bangladesh officials told the meeting that jute and jute goods account for about 38% of the country’s total exports to Pakistan, but shipments have declined significantly.
Bangladesh has urged Pakistan to remove existing import tariffs on jute and jute goods in a bid to narrow the trade imbalance and revive exports of the traditional fibre, which have fallen sharply in recent years.
The proposal was made at the ninth session of the Bangladesh-Pakistan Joint Economic Commission (JEC), held yesterday (27 October) in Dhaka – the first such meeting in nearly two decades.
The Bangladesh delegation was led by Finance Adviser Salehuddin Ahmed, while Pakistan's team was headed by Federal Minister for Petroleum Ali Pervaiz Malik.
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Bangladesh officials told the meeting that jute and jute goods account for about 38% of the country's total exports to Pakistan, but shipments have declined significantly. Export earnings from the sector dropped from $63 million in FY22 to $23 million in FY24.
Both sides agreed that bilateral trade remains below potential, currently valued at under $1 billion, and stressed the need for greater collaboration to unlock new opportunities.
Pervaiz Malik said Pakistan regularly imports raw jute from Bangladesh and is keen to increase procurement of jute and diversified jute products. He added that discussions also covered surplus agricultural produce, pharmaceuticals, and energy cooperation.
"The achievements of this bilateral session will grow significantly in the coming years," he said, adding that the next JEC meeting will set specific targets to expand trade between the two nations.
After the meeting, Salehuddin told reporters, "We discussed several issues of mutual interest such as agriculture, trade, IT, and food security. I believe our agreements will benefit both nations."
He added that Bangladesh placed strong emphasis on regional cooperation, saying, "We want to build an environment of collaboration not only between our two countries but across South Asia. Strengthening the Saarc process, which has become weak in recent years, is crucial."
The two sides agreed to hold regular meetings, with the tenth JEC session scheduled to take place in Islamabad. The 8th meeting was held in Dhaka in September 2005.
During FY24, Pakistan exported goods worth $661 million to Bangladesh, while Bangladesh's exports to Pakistan stood at just $57 million, reflecting a substantial trade deficit for Dhaka.
MoU on halal product trade
An MoU on Halal trade cooperation was signed between the Bangladesh Standards and Testing Institution (BSTI) and the Pakistan Halal Authority (PHA), aimed at facilitating certification and trade in halal products.
Under the arrangement, BSTI-approved halal products will be eligible for export to Pakistan without re-testing, while PHA-certified products may enter Bangladesh on the same basis.
ERD officials said both sides agreed to strengthen business-to-business engagement and diversify the trade basket. They also discussed exploring a concessionary trade agreement offering deeper tariff cuts than those under SAFTA.
Pakistan requested faster access to Bangladesh's mango market, while both sides agreed to encourage joint-venture investments in sectors such as textiles, jute, leather, pharmaceuticals, light engineering, and renewable energy.
Pakistan also expressed appreciation for exporting 52,000 tonnes of white rice to Bangladesh earlier this year under a G2G arrangement and agreed to finalise another MoU between the Trade Corporations of Pakistan and Bangladesh for agricultural commodities.
Both countries will also explore institutional linkages between the two countries' revenue boards to improve revenue generation and the tax-to-GDP ratio.
Connectivity and education
Both countries agreed to resume direct air connectivity and explore the establishment of direct shipping links between Chittagong and Karachi ports. Pakistan also offered the use of Karachi Port for Bangladesh's trade with China and other regional partners.
The two sides will set up a joint working group on Maritime Cooperation and another on Information Technology and Telecommunications.
Pakistan announced the expansion of scholarships for Bangladeshi students, increasing the number from five to twenty-five, alongside plans to establish a Bangladesh-Pakistan Knowledge Corridor with 500 new scholarships.
They also agreed to strengthen cooperation between the central banks in SME financing, microcredit, and financial inclusion, and to enhance tourism and cultural exchange through easier visa procedures.
Expanding cooperation in key sectors
The two nations agreed to explore investment and partnership opportunities in automotive manufacturing (including EVs), industrial machinery, power equipment, sports goods, ICT, and renewable energy.
They also agreed to share experience in export processing zone management and encourage Pakistani investors to explore opportunities in jute diversified products .
Recognising the strong textile ties – as several Bangladeshi companies import 50%-70% of their fabrics from Pakistan – both sides agreed to promote joint-venture investments in the textile sector.
In agriculture, the parties decided to form a Joint Working Group to strengthen cooperation in tea, genetic engineering, and pest management, and to renew a 2006 MoU between the Pakistan Agricultural Research Council (PARC) and the Bangladesh Agricultural Research Council.
