TRENDS AND PROSPECTS OF TRADE BETWEEN BANGLADESH AND G7 COUNTRIES: AN EXPLORATORY STUDY

Abstract

The objective of the paper is to study the status of trade between Bangladesh and G7 countries. It has found that Bangladesh has trade surplus with G7 countries except Japan. Textiles, leather, jute, pharmaceutical products, cement, agricultural goods, fish/ seafood, glass, and tea are the major exported goods of Bangladesh. Trade Intensity Index shows that Bangladesh has strong trade relations with Germany, United Kingdom, and France, while it has weak trade relations with Japan. Bangladesh has a higher Herfindahl-Hirschman Index with the United States, which shows Bangladesh exports more selected products to the United States than the other G7 member countries. Trade Complementarity Index value of Bangladesh to G7 Countries is not very high, i.e. export profile of Bangladesh does not match the import profile from G7 countries. Low brand recognition, quality standards, limited access to financial resources for enterprises, and potential losses in access to priority markets are the basic challenges before the export sector of Bangladesh. Land, natural gas and electricity shortages remain vital obstacles to investment. Political unrest, temporary shut down of business operations, and religious upraises affects supply chains. Therefore, the Government of Bangladesh should implement policies properly for mitigating such challenges, and also should diversify the items of export for reducing risk.