Two days of talks headed by the foreign secretaries of Bangladesh and Myanmar are scheduled to prioritise the establishment of direct letters of credit (L/Cs) to facilitate trade between the two countries.

The talks between Bangladesh and Myanmar are scheduled to begin in Dhaka on 29 December, and officials are hopeful the L/C issue will be addressed seriously after several years of discussions.

Lack of opportunities

Exporters and importers in both Bangladesh and Myanmar face problems due to the absence of direct L/C opening facilities between the two countries' banks.

Banks in Bangladesh usually open L/Cs with Myanmar banks via third country banks. This means it takes longer to execute trades and leads to higher transaction costs.

Lengthy discussions

The decision to examine and devise new mechanisms for opening L/Cs directly between the two countries was taken in 2007.

Before that, the two countries have for many years said they were seeking new L/C-based mechanisms to replace a bilateral trade finance system that ended in 2003, (DC World News, 16 May 2005).

Serious consideration

This time, the Bangladeshis at least seem to be hoping for real progress.

"We will raise the L/C issue seriously," a top official in Bangladesh's foreign ministry told local media.

The talks will also feature discussions on establishing a direct air route between Dhaka and Yangon, eliminating problems relating to business visas and dozens of other ideas for increasing bilateral trade.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.