Highlights:
- Major obstacles to increasing Japanese investment in Bangladesh
- NBR- and customs-related issues
- Policy inconsistency
- Bureaucratic complexities
- Bangladesh signed EPA with Japan on 6 February
- 7,379 Bangladeshi products to enjoy duty-free access to Japan
- 1,000 Japanese products to receive duty-free access to Bangladesh
Business leaders have warned that unless existing public and private sector barriers to investment and exports are removed, Bangladesh will not be able to fully utilise the opportunities created by the recently signed Economic Partnership Agreement (EPA) with Japan. Otherwise, they said, the agreement risks remaining only on paper.
They made the remarks at a seminar titled “Export Potential Under Bangladesh-Japan EPA: Challenges and Way Forward” organised by the Export Promotion Bureau (EPB) yesterday (3 March).
Dr AKM Asaduzzaman Patwary, secretary general of the Dhaka Chamber of Commerce and Industry (DCCI), said a study by the Japan External Trade Organization (Jetro) found that Japanese investors feel there is scope for reinvestment in Bangladesh.
“Despite that, investment has not increased significantly. Last year, only $40 million in investment came,” he said.
He added, “We do not want to be complacent about the EPA. We need to identify the roadblocks and take initiatives to resolve them. If these issues are not addressed, the potential of the EPA will remain only on paper.”
Mohammad Hasan Arif, vice chairman of EPB, moderated the seminar, which was attended by business leaders and experts from both countries.
Other business representatives highlighted existing challenges to expanding trade with Japan and urged prompt solutions.
Speaking to The Business Standard after the event, Dr Patwary said, “NBR- and customs-related issues, policy inconsistency and bureaucratic complexities are major obstacles to increasing Japanese investment in Bangladesh.”
Maintaining product quality in line with Japanese standards is also a key challenge for exporters, speakers noted.
Other speakers echoed the importance of meeting Japanese quality standards. They said Japan offers significant export potential, but without focusing on quality, that potential cannot be realised.
Bangladesh signed the EPA with Japan on 6 February, under which around 7,379 Bangladeshi products will enjoy duty-free access to the Japanese market, while more than 1,000 Japanese products will receive duty-free access to Bangladesh in phases.
Kanchan Miah, managing director of Arot Agro, said his company exports vegetables from Bangladesh to Japan. However, due to the suspension of the direct Dhaka-Narita flight, they are facing difficulties.
He said they used to export about one tonne of vegetables per flight. They have also received orders to export mangoes, and there is potential to export carrots. But with the direct flight suspended, shipping via alternative routes is increasing costs.
He urged the government to take measures to resume the direct flight.
Business leaders also identified language barriers, technological gaps and compliance requirements as major challenges in expanding exports to Japan.
Japan is a significant market for Bangladesh’s ready-made garments (RMG). Asif Ashraf, managing director of Urmi Group, a leading RMG exporter to Japan, said, “In Japan’s $23 billion apparel market, we are capturing only a very small share. While there is strong demand for man-made fibre garments, we remain stronger in cotton-based products.”
He said exporters must have patience to succeed in the Japanese market. “Once trust is established, they will place orders here even if prices are higher.”
Tareq Rafi Bhuiyan, president of the Japan-Bangladesh Chamber of Commerce and Industry, and Hajime Suzuki, executive officer of RX Japan Ltd, presented keynote speeches.
Hajime Suzuki, executive officer (Global Relations) of RX Japan, a major Japanese trade show and exhibition organiser, advised Bangladeshi exporters to adopt a three-year strategy to expand exports to Japan.
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