Bangladesh could become a regional hub for trade and investment in the wake of ongoing geopolitical tensions and growing focus on the Indo-Pacific region, according to Paul J Thoppil, Canada's trade representative for the Indo-Pacific.
However, the country would need to sign Foreign Investment Protection Agreements (FIPAs) in order to encourage foreign direct investment (FDI) to this end, he said.
A FIPA is an international treaty between two countries that imposes rules on how foreign investors from either side can be treated while doing business with the other, thereby protecting their interests.
Most countries have taken advantage of the huge low-cost labour force in China, Thoppil said.
"But given geopolitical tensions, a lot of foreign multinationals are considering adopting a combined China Plus One policy," he added.
China Plus One refers to a global business strategy where companies avoid investing only in China and opt for a more diverse portfolio featuring a variety of ASEAN countries.
Bangladesh has the opportunity to benefit from this strategy amid the changing global supply chain thanks to its low-cost and educated labour force, Thoppil said.
"I would like Bangladesh to leverage this attribute as demonstrated in the country's garments sector to increase trade and investment with Canada and other parts of the North American market," he added.
Thoppil made these comments in an exclusive interview with The Daily Star on May 21 during a three-day visit to Dhaka, where he held meetings with top government officials to promote bilateral trade and investment.
He said he observed vibrancy in the economy, confidence in the private sector, good infrastructure and a youthful population.
In fact, Bangladesh's economic progress in the past two decades has been so fast that it was not well observed by the outside world, he said.
"I think we should send the Canadian private sector a signal that Bangladesh is a fantastic place for investment as it could be a hub for exports to India, China and neighbouring countries," he said.
There is also a willingness on the government side to signs FIPAs, which gives a note of confidence and some degree of legal recourse in protecting investments from other countries.
"So, I came here to signal, that beyond diversifying our trade, we want to encourage investment in this country and also tell Bangladeshi companies to consider Canada as an investment destination," Thoppil said.
"We need to give both parties confidence through this agreement," he added.
However, bilateral trade with Canada rose significantly to about $3.5 billion a year, with Bangladesh exporting goods worth more than $2 billion to Canada.
Bangladesh's main export items include garments while Canada's are wheat, pulses and potash.
Canada is also deepening its relations with Bangladesh in areas of agricultural research by developing various crops that are resilient to climate shocks.
Besides, with global focus shifting to the Indo-Pacific region, the highly developed economies of North America have a strategic desire to step up engagements with Bangladesh and some 40 other economies in the region, Thoppil said.
Canada aims to achieve this through its five pillars, which include ensuring peace, security and stability, expanding trade and investment, fostering sustainable and inclusive growth, increasing investment in people to people contacts and deepening diplomatic engagement in the region.
Thoppil, who has been posted in Indonesia, said there are already more than 100,000 Bangladeshis, of which roughly 15,000 are students, living in Canada.
"We want more Bangladeshis to come to Canada and are also looking for young Canadians to come work and study in this region," he added.
Thoppil informed that Canada is also willing to support Bangladesh in its transition to middle-income status following its graduation from least developed country status in 2026.
"We will provide duty-free access to Bangladeshi products for three years after 2026. We will give more support in terms of tariff reduction but it will be conditional on labour reforms as recommended by the International Labour Organization," Thoppil said.
Canada will also look at the aspects of inclusivity, including women empowerment and Bangladesh's pursuit of multilateral systems, he added.