BILATERAL TRADE BETWEENBIL ATERAL TRADE

Submitted to:

Institute of Business Administration November 18, 2013

BILATERAL TRADE

Bilateral trade is the exchan e of oods bet!een t!o countries" Bilateral trade a reements ive #reference to certain countries in commercial relationshi#s, facilitatin trade and investment bet!een the home countr$ and the forei n countr$ b$ reducin or eliminatin tariffs, im#ort %uotas, ex#ort restraints and other trade barriers" Bilateral trade a reements can also hel# minimi&e trade deficits" 'Bilateral trade( Bilateral trade !as hi hl$ #o#ular !ithin )innish business circles, as it allo!ed the commission of ver$ lar e orders, additionall$ !ith less strin ent re%uirements for so#histication or %ualit$, if com#ared to *estern mar+ets" ,he Soviet side !as motivated to #artici#ate in clearin trade because the arran ement essentiall$ #rovided chea# credit" ,he o#tion !as to sell obli ations to the international mar+et, and #a$ interest in hard currenc$" -a#ital, such as icebrea+ers, train carria es or consumer oods, could be obtained from )inland, and the cost !ould sim#l$ become clearin account deficit, eventuall$ to be #aid bac+ as e" " crude oil, or as orders such as nuclear #o!er #lants '.oviisa I and II(" -learin trade !as at its busiest u# to the 1/00s, but be an to lose its momentum in the 1/80s" In the last of its $ears, the Soviet 1nion2s debt be an accumulatin on an alarmin rate into clearin accounts" As a result, the Soviet 1nion started to #a$ the deficits !ith oil, a ood !ith little value added and easil$ exchan eable to hard currenc$, !hich militated a ainst the #rinci#le of bilateral trade" *ith the dissolution of the Soviet 1nion, this form of trade has mostl$ disa##eared" Bilateral trade is a manifestation of bilateralism3 in contrast, multilateralism and in #articular

multilateral trade a reements became more im#ortant" '.aurila, 1//4(

BILATERAL COOPERATION MECHANISMS BETWEEN BANGLADESH AND VIETNAM

5n 6arch 10, 1//0, 7ietnam and Ban ladesh si ned an A reement on 8stablishment of the 9oint -ommission for 8conomic, ,rade, -ultural, Scientific and ,echnolo ical -oo#eration" ,he first meetin of the 9oint -ommission !as held in :anoi, 7ietnam on )ebruar$ ;<0, 200;" Ban ladesh =ele ation !as led b$ :"8"6r 6" Saifur >ahman, 6inister for )inance and ?lannin , @overnment of the ?eo#leAs >e#ublic of Ban ladesh"

Geographical positions of Bangladesh and Vietnam

7ietnam and Ban ladesh si ned an 651 on #olitical consultation bet!een the t!o 6inistries of )orei n Affairs in 1//B" In 2004, the t!o sides #lanned to hold the first #olitical consultation meetin in =ha+a, !hich !as then #ost#oned indefinitel$ due to unstable securit$ situation in =ha+a"

TRADE BETWEEN VIETNAM AND BANGLADESH DOWN THE YEARS

Ban ladesh is not a com#letel$ ne! mar+et for 7ietnam, but trade bet!een the t!o countries is lo!<+e$ as 7ietnamese firms are still hesitant to ta# this mar+et" :o!ever, in the #ast fe! $ears, some 7ietnamese com#anies have started to trade !ith Ban ladeshi com#anies and !ith #ositive results"

Since 2003, foot!ear #roducer Bitis has reali&ed the #otential of the Ban ladeshi mar+et, after alread$ ta##in into mar+ets in Ne#al, India, and ?a+istan" In 200B, Bitis chose five official distributors in Ban ladesh and be an to sell #roducts there" No!, sales of the com#an$ are sho!in a stead$ ro!th"

In 9ul$ this $ear, the :oa ?hat @rou# ex#orted the first batch of 10,000 tons of blast<furnace sla to the Shun Shin @rou#" 1# to no!, :oa ?hat has ex#orted three batches of blast<furnace sla to this mar+et and !ill su##l$ around 80<100 tons of sla annuall$, accordin to the a reement" In realit$, Shun Shin @rou# im#orts u# to 300,000<B00,000 tons of blast<furnace sla ever$ $ear for the cement industr$ in Ban ladesh"

Ban ladesh also considers its arment and textile industr$ as one of the main industries, same as 7ietnam" @arment ex#orts from Ban ladesh have continuousl$ increased, reachin nearl$ 1SC22"3 billion in 2011" :o!ever, Ban ladesh de#ends on im#orted materials as much as domestic<made fabrics to meet B0 #ercent of

demand of the arment industr$" 6oreover, Ban ladeshi consumers #refer arments and textile #roducts from 7ietnam because of their reasonable #rice and hi h %ualit$"

,hus in 2011, Ban ladesh im#orted finished #roducts and materials for their arment industr$ from 7ietnam valued at about C0"4 billion"

In addition, Dafar 5sman, director of a timber com#an$ in Ban ladesh, said that com#anies in this industr$ are in dire need for a stead$ su##l$ of round tea+ !ood and tea+ #lan+s on a monthl$ basis" 7ietnam has an advanta e in the !ood industr$ so this is a ood o##ortunit$ for firms to coo#erate !ith each other"

After man$ $ears of ex#erience in doin business !ith Ban ladeshi com#anies, N u$en ,ien =at, director of 7issai Im#ort<8x#ort -om#an$, said that demand to im#ort oods in this mar+et is hu e but 7ietnamese firms have not develo#ed all #otential $et due to lac+ of information" :ence, authorities should hel# set u# coordination bet!een firms of the t!o countries"

Besides #romotin ex#orts, the Ban ladeshi overnment is also encoura in forei n investors to invest their mone$ in the countr$ to increase oods su##l$ as !ell as to develo# technolo ical standards for its domestic mar+et"

Accordin to Su#radi# -ha+man, Ban ladeshi Ambassador to 7ietnam, his countr$ has reat demand for arments, foot!ear, !ood<#ul#, and china!are as !ell as for mechani&ed a riculture" -urrentl$, a fe! 7ietnamese firms have hel#ed the countr$ to im#rove some sectors that had remained undevelo#ed"

7iettel bou ht sta+es in ,eletal+ Ban ladesh .td for C300 million in 200/" After enterin this mar+et, 7iettel has set u# 1/,400 base station to!ers, #rovided services to 3"4 million clients, and installed 40,000 +ilometers of fiber o#tic cables and introduced 3@ technolo $"

=ata iven b$ the Statistics 5ffice of Ban ladesh sho!ed that the ross domestic #roduct re! ;"0 #ercent in 2011 and is ex#ected to reach 0"2 #ercent this $ear" 8x#ort ro!th !as 21"2 #ercent in the #ast three $ears and im#ort ro!th !as 22"2 #ercent"

Ban ladesh has been o#enin trade !ith other countries to maintain its economic ro!th in the comin $ears" In order to achieve this, the overnment has built man$ #olicies to create a fair business environment for both local and forei n investors" )urthermore, at ever$ meetin , Ban ladeshi firms al!a$s tr$ to #ersuade 7ietnamese firms to invest directl$ instead of Eust ex#ortin or im#ortin on small contracts" Accordin l$, the former !ill su##ort the latter !ith le al #rocedures, advertisin , and mar+et information so that 7ietnamese firms mi ht meet Ban ladeshi consumer needs" 'Ahmed, 2012(

CURRENT TRADE CONDITIONS

)ollo!in is the full text of the 7ietnam<Ban ladesh Eoint communi%uF !hich !as si ned b$ ?rime 6inister Shei+h :asina durin her tri# to 7ietnam on November 2012

At the invitation of N u$en ,an =un , ?rime 6inister of 7ietnam, ?rime 6inister Shei+h :asina of Ban ladesh #aid an official visit to 7ietnam from November 2<B, 2012" ,he visit !as historic for the fact that it !as the first official visit of ?rime 6inister Shei+h :asina to 7ietnam"

,he official !elcomin ceremon$ for ?rime 6inister Shei+h :asina !as held at the ?residential ?alace in :anoi on November 2, 2012" =urin her visit, ?rime 6inister Shei+h :asina held tal+s !ith and attended the official ban%uet hosted b$ ?rime 6inister N u$en ,an =un , met !ith N u$en ?hu ,ron , Secretar$ @eneral of the -ommunist ?art$ of 7ietnam and ,ruon ,an San , State ?resident of the Socialist >e#ublic of 7ietnam, visited :o -hi 6inh 6ausoleum, laid floral tribute at the 6emorial of the :eroic 6art$rs, attended the 7ietnam GH82113 Ban ladesh Business )orum and visited some economic and cultural establishments in :anoi" At the end of the visit, the t!o sides released a 9oint -ommuni%uF"

Prime Minister Sheikh Hasina during her Vietnam Visit in November 20 2

,he bilateral tal+s !ere held in an atmos#here of friendshi#, mutual trust and understandin " ,he t!o sides informed each other of each countr$As #olitical and economic situation" ?rime 6inister Shei+h :asina ex#ressed her admiration for the coura eous stru le of the 7ietnamese #eo#le for national inde#endence and reunification and con ratulated the 7ietnamese @overnment and #eo#le on their tremendous achievements in the reform #rocess conducted over the #ast $ears" ?rime 6inister N u$en ,an =un con ratulated the @overnment and #eo#le of Ban ladesh on their reat achievements in national construction and develo#ment and on the countr$As ro!in role and #osition in the re ion and the !orld"

,he t!o leaders noted !ith satisfaction the develo#ment and diversification of bilateral relations over the #ast B0 $ears

since the establishment of di#lomatic relations on )ebruar$ 11, 1/03" ,he t!o .eaders a reed to #romote the exchan e of hi h<level visits !ith a vie! to further enhancin bilateral ties" Accordin l$, the Ban ladesh ?rime 6inister invited ?rime 6inister N u$en ,an =un to #a$ an official visit to Ban ladesh" ?rime 6inister N u$en ,an =un acce#ted the invitation !ith #leasure" ,he time of the visit !ould be arran ed throu h di#lomatic channel" ,he ?rime 6inister of Ban ladesh also extended an invitation to the Secretar$ @eneral of the -ommunist ?art$ of 7ietnam to #a$ an official visit to Ban ladesh in the comin $ears"

,he t!o .eaders a reed to further stren then coo#eration on #olitical, securit$, defense, econom$, trade and investment, information<communication, and a riculture" ,he$ also a reed to or ani&e the Second 6eetin of the 7ietnam<Ban ladesh 9oint -ommission and the first ?olitical -onsultation bet!een the t!o 6inistries of )orei n Affairs at an earl$ date to revie! and set out directions for bilateral coo#eration in the comin $ears"

,he t!o sides a reed to ste# u# coo#eration in securit$ and defense throu h exchan e of dele ations at all levels3 exchan e of ex#erience on #artici#ation in 1N ?eace+ee#in 5#erations and co<o#eration in fi htin a ainst transnational crimes and traffic+in in #ersons" 5n this occasion, the Ban ladesh side also reaffirmed that it !ould create favorable conditions for 7ietnamese com#anies to establish contacts and ex#lore o##ortunities for coo#eration !ith Ban ladesh #artners includin in the militar$ industr$ and lo istic su##l$"

,he t!o .eaders !itnessed the si nin of the 6emorandum of 1nderstandin bet!een the 6inistr$ of A riculture and >ural =evelo#ment of 7ietnam and the 6inistr$ of )isheries and .ivestoc+ of Ban ladesh in the field of )isheries and .ivestoc+3 and the 8xtension of the 651 bet!een the @overnment of the Socialist >e#ublic of 7iet Nam and the @overnment of the ?eo#leAs >e#ublic of Ban ladesh on coo#eration in the field of a riculture si ned on 22nd 6arch 200B in =ha+a3 6emorandum of 1nderstandin on trade #romotion bet!een the 7iet Nam ,rade ?romotion A enc$ '7I8,>A=8( under 6inistr$ of Industr$ and ,rade of the Socialist >e#ublic of 7iet Nam and the 8x#ort ?romotion Bureau '8?B( under 6inistr$ of -ommerce of the ?eo#leAs >e#ublic of Ban ladesh3 651 on coo#eration on establishment of the Ban ladesh<7ietnam Business -ouncil and the 7ietnam<Ban ladesh Business -ouncil bet!een the )ederation of Ban ladesh -hamber of -ommerce and Industries ')B--I(, and the 7ietnam -hamber of -ommerce and Industr$ '7--I( " ,he t!o .eaders noted that these a reements #rovide im#ortant le al foundation for relevant A encies and 6inistries of the t!o countries to im#lement and ex#and coo#eration in s#ecific fields"

5n this occasion Ban ladesh officiall$ reco ni&ed 7ietnamAs mar+et econom$ status !ith a vie! to further #romotin bilateral economic and trade coo#eration and dee#enin the !arm friendshi# and thrivin coo#eration bet!een the t!o countries"

,he t!o sides noted !ith satisfaction the close coo#eration bet!een the t!o 6inistries of Information and communication, #articularl$ in coverin ne!s on the occasion of the t!o

countriesA celebration of maEor anniversaries and hi h level visits, hence the #romotion of each countr$As relations" ,he t!o sides a reed to stren then coo#eration in information and communication, #articularl$ in trainin , sharin of mana ement ex#erience and in s#eciali&ed sector of #ost and telecommunication"

,he t!o sides hi hl$ valued coo#eration and close coordination bet!een the t!o countries in re ional and international fora" In this connection, the t!o sides confirmed reci#rocal su##ort bet!een 7ietnamAs candidature to the 1nited Nations :uman >i hts -ouncil '201B<201;( and Ban ladeshIs candidature to the 1nited Nations :uman >i hts -ouncil '2014<2010(" Ban ladesh ex#ressed ratitude for 7ietnamAs su##ort to the formerAs membershi# in the Asia< 8uro#e 6eetin 'AS86("

,he t!o sides a reed to continue !or+in to ether on institutionali&ation of a lobal com#act to deal !ith climate chan e in the four reco ni&ed trac+s of action < via ada#tation, miti ation, financin and technolo $ transfer" ,he$ also stressed that the develo#ed countries must ta+e the lead in ma+in ambitious commitments on emission cuts, climate finance and technolo $ transfer and the develo#in countries must also do their #art on the basis of differentiated res#onsibilit$"

7ietnam noted Ban ladeshAs desire to foster the #artnershi# and coo#eration !ith AS8AN, to Eoin the 8ast<*est 8conomic -orridor '8*8-( and 6e+on <@an es -oo#eration '6@-( and

assured Ban ladesh of #ursuin the matter !ith other members"

13" ,he t!o .eaders noted !ith satisfaction the #ositive outcomes of the official visit b$ ?rime 6inister Shei+h :asina, !hich stands as a testimon$ to the continuation of excellent ties bet!een the t!o countries"

1B" Ban ladesh ?rime 6inister Shei+h :asina than+ed the @overnment and the #eo#le of 7ietnam for the hos#italit$ and !arm !elcome extended to her and the Ban ladesh dele ation durin her official visit to 7ietnam '7ietnam Net, 2012(

CONCLUSION

Ban ladesh and 7ietnamAs bilateral trade, des#ite their combined mar+et of 240 million #eo#le, do not do Eustice to their total #otential" In South Asia, Ban ladesh is the second lar est im#orter of 7ietnamese #roducts after India" In fact, Ban ladesh is conductin better trade !ith all other AS8AN countries, in terms of her ex#orts to those countries than !ith one of her most friendl$ countries J 7ietnam

BIBLIOGRAPHY
Ahmed, N" '2012, November 14(" Bangladesh! another potential market for Vietnam" >etrieved November 10, 2013, from htt#:KKdefence"#+KthreadsKban ladesh< another<#otential<mar+et<for<vietnam"21/108K Bilateral trade" 'n"d"(" >etrieved November 10, 2013, from Investo#edia: htt#:KK!!!"investo#edia"comKtermsKbKbilateral<trade"as# .aurila, 9" '1//4(" #innish$Soviet %learing &rade and Pa'ment S'stem( Histor' and )essons" Suomen ?an++i" 7ietnam Net" '2012, November 04(" Vietnam! Bangladesh issue *oint communi+ue" >etrieved November 11, 2013, from 7ietnamnet: htt#:KKen lish"vietnamnet"vnKfmsK overnmentK41840Kvietnam<<ban ladesh< issue<Eoint<communi%ue"html