ABSTRACT
This study analyzes bilateral trade relations between Bangladesh and Australia with a focus on the status of the two countries as natural trading partners, the pattern of their current bilateral trade, intra-industry trade, comparative advantages, competitiveness and cumulative growth of trade, trade creation effect and existing tariff barriers. Several trade-related statistical techniques have been utilized. The major findings of the study are that Bangladesh and Australia are natural trading partners, because they do not export similar products. The bilateral trade ratio has improved over time in favor of Bangladesh. Intra-industry trade between the two countries has increased in disaggregated commodity categories, rather than in broad commodity items. Bangladesh does not experience competitive pressure from Australia in world markets. Bangladesh is having a large trade creation effect in knitwear items in the Australian market. Australia provides a duty-free and quota-free (DFQF) facility to Bangladesh for all export items, whereas Bangladesh still applies most-favored nation (MFN) duty on products imported from Australia. The present study has important policy implications for expanding bilateral trade between Bangladesh and Australia, not only for earning revenue but also for the growth and prosperity of both nations.
