A new report shows that an improvement in the trade facilitation environment by one per cent is likely to increase 3.2 per cent of Foreign Direct Investment (FDI) into manufacturing sector.
Prepared by the Global Alliance for Trade Facilitation, the report, titled ‘Can Trade Facilitation Drive Manufacturing FDI?’ analysed the importance of trade facilitation in attracting and retaining investment.
“Developing economies with strong trade facilitation environments were also found to attract high-value investments, especially in desirable industries such as auto parts and aerospace manufacturing,” the report mentioned.
The report also observed that FDI in manufacturing has been crucial to emerging economies’ success stories.
Member countries of the World Trade Organisation (WTO) are now on the move to implement the Trade Facilitation Agreement (TFA) which comes into effect on February last.
Trade facilitation means easing of customs procedures through electronic transaction system across the border.
Bangladesh, being a Least Developed Country (LDC), is not obliged to implement the TFA immediately.
The country is now in a process to submit its notification to the WTO. Once the notification is submitted, the TFA becomes obligatory for the country.
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