Md. Tareq; Dbarta24 — In a strategic bid to cushion the economic impact of losing duty-free market access upon graduating from Least Developed Country (LDC) status, Bangladesh is aggressively pushing to negotiate and sign a flurry of bilateral trade deals.
The government has prioritized securing Free Trade Agreements (FTAs), Comprehensive Economic Partnership Agreements (CEPAs), and Economic Partnership Agreements (EPAs) with major global economies and regional trading blocs.
Although Bangladesh was scheduled to graduate from LDC status by November 2026, the government has formally requested a three-year extension from the United Nations.
In tandem, a draft national roadmap titled “Sustainable, Smooth, and Stable Transition from LDC (2026–2029)” has been formulated, setting an ambitious target to sign at least 10 new FTAs, CEPAs, or EPAs by 2031.
Avoiding Tariff Blows
Post-graduation, Bangladesh will no longer qualify for Generalized System of Preferences (GSP) and WTO-mandated duty-free privileges. Major export destinations—including the European Union (EU) and the UK—could impose duties of up to 12% on Bangladeshi goods, threatening an estimated 6% to 14% drop in overall exports.
Speaking on the proactive policy shift, Commerce Minister Khandker Abdul Muktadir noted that the government has already taken major strides to mitigate these hurdles. He highlighted that FTAs with five to six nations will be finalized in the near future, alongside formal FTA negotiations with the EU, Bangladesh’s largest trade destination.
Major Breakthroughs: Japan, South Korea, and EU Roadmap
Bangladesh achieved a historic milestone on February 6 by signing an EPA with Japan—the nation’s first full-fledged trade agreement with a major economy.
Under this deal, 7,379 Bangladeshi products (including ready-made garments) gain 100% duty-free access to the Japanese market, while 1,039 Japanese items will receive duty-free or preferential access in Bangladesh.
Simultaneously, negotiations for a CEPA with South Korea have officially concluded. Pending legal approvals, the deal will provide duty-free access to 8,428 Bangladeshi products—ranging from apparel and leather goods to footwear and pharmaceuticals—in exchange for concessions on 1,054 South Korean goods.
Crucially, preliminary discussions with the European Union are moving forward. A technical delegation from the EU is set to visit Dhaka shortly to chart out an FTA implementation roadmap.
To oversee strategic directions and negotiations, the government has constituted a 17-member high-level advisory panel chaired by the Commerce Minister.
“The EU is ready to initiate preliminary discussions on an FTA with Bangladesh and has already submitted a formal proposal. Timely reforms, removal of non-tariff barriers, and improving the business environment remain critical,” stated EU Ambassador Michael Miller following a recent meeting.RCEP Expansion and Global Outreach
Bangladesh is also preparing to join the China-led Regional Comprehensive Economic Partnership (RCEP)—the world’s largest trading bloc comprising 15 nations, representing 2.33 billion people and a $26.3 trillion market.
Feasibility studies indicate joining RCEP could boost Bangladeshi exports by up to $5 billion.
Furthermore, active negotiations and preliminary groundwork are underway with the UAE, Singapore, Malaysia, the US, Canada, China, Indonesia, Australia, Saudi Arabia, and regional alliances like BIMSTEC.
Expert Assessment: Policy Success Needs Structural Support
Economic analysts have welcomed the aggressive pivot toward bilateral trade agreements as a necessary step, while emphasizing the need for domestic reforms.
Dr. M.A. Razzaque, Chairman of Research and Policy Integration for Development (RAPID), noted that the agreement with Japan sends a strong signal regarding Bangladesh’s negotiation capabilities. However, he cautioned that trade deals alone are not a magic bullet.
“These partnerships should not be viewed merely as trade deals; their primary objective is to attract foreign direct investment. Unless we address infrastructural bottlenecks, power and gas shortages, and bureaucratic hurdles, realizing the full potential of these agreements will remain challenging,” Dr. Razzaque pointed out.