Article: https://www.aa.com.tr/en/asia-pacific/bangladesh-bhutan-sign-preferential-trade-deal/2067458
Analysis:
This past Sunday, Bangladesh and Bhutan signed a preferential trade agreement (PTA) as a method of improving bilateral trade. The two have a long history of positive relations. In 1971, Bhutan was the first country to publicly acknowledge the sovereignty of Bangladesh. Ceremoniously, this PTA marks the 50 year anniversary of these diplomatic ties.
The importance of the PTA is it will allow more products from both countries to make it onto each other’s markets duty-free (without additional taxes). Prime Minister Lotay Tshering of Bhutan and Prime Minister Sheikh Hasina of Bangladesh are both urging their businessmen to take the opportunity offered by this agreement.
The reality for these two countries is they are sandwiched between India, a powerful neighbor. This is likely one of the reasons the two countries stick together and continue to make agreements such as this PTA despite differences in religion and political culture
Overall this PTA is likely to be extremely positive for the region short term as it facilitates regional trade. This may also be beneficial in getting other countries to sign similar deals that further improve trade relationships.
Under liberalist theory, trade between these two countries is beneficial to possibly building complex interdependence. There is a possibility that if this trade relationship is beneficial economically, then other countries may decide they want to receive the same benefit and try to join in, essentially creating a trading network. Trade promotes peace and decreases the likelihood of conflicts especially if a trade network is able to form. However, in order for this to be successful, the military presence would need to be strong enough to protect this network. This would mean that global powers would likely need to join to be able to sustain this possibility.
Under realist theory, alliances are fluid and if there is a shift in either countries’ natural interest the two may no longer be aligned. However, the alliance between the two are currently going strong.