Alongside bilateral negotiations, Dhaka is seeking entry into the 19-member Regional Comprehensive Economic Partnership (RCEP).
Illustration: TBS
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Illustration: TBS
Highlights:
- Bangladesh pursuing trade agreements with 10 countries, economic blocs ahead of LDC graduation
- Bangladesh has completed 38 feasibility studies on potential trade partners
- Bangladesh signed its first formal FTA with Japan in February, pending ratification
- South Korea negotiations are complete, with cabinet approval, signing still pending
- Bangladesh, EU preparing initial online FTA discussions for late October or November
- Bangladesh aims to finalise trade agreements with South Korea, the UAE by year-end
- First-round FTA talks with Malaysia scheduled for 27–29 October in Dhaka
Bangladesh is aggressively pursuing Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs) with 10 nations and economic blocs to safeguard its export competitiveness ahead of its scheduled graduation from the Least Developed Country (LDC) status.
Alongside bilateral negotiations, Dhaka is seeking entry into the 19-member Regional Comprehensive Economic Partnership (RCEP). Simultaneously, the government has requested a three-year extension to its graduation timeline, currently set for 24 November 2026, citing global economic headwinds and the imperative for domestic structural reforms.
According to a Commerce Ministry progress report presented to the Parliamentary Standing Committee on 7 October, Bangladesh has completed 38 feasibility studies on potential trade partners and is actively negotiating terms with key global markets.
Negotiations advance across key markets
The ministry revealed that Bangladesh is pursuing FTAs with the European Union, Singapore, Malaysia, New Zealand, Turkey, Nepal, Canada, and Mauritius, while negotiating CEPAs with South Korea and the United Arab Emirates (UAE).
Infograph: TBS
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Infograph: TBS
Speaking to The Business Standard, Commerce Secretary Md Ataur Rahman Khan noted substantial momentum across several tracks:
- Japan: Bangladesh signed an Economic Partnership Agreement (EPA) on 6 February 2026, described by the ministry as the country’s first formal FTA, which currently awaits ratification.
- European Union: Prime Minister Tarique Rahman wrote to European Commission President Ursula von der Leyen in April seeking an FTA. Both sides have appointed negotiating teams, with initial online discussions expected by late October or November.
- South Korea: Negotiations are complete and awaiting cabinet approval. Dhaka aims to sign the deal by December.
- Singapore & UAE: Bangladesh has wrapped up four rounds of FTA talks with Singapore and expects to finalise terms after six rounds. Meanwhile, Cepa negotiations with the UAE are moving into a third round in March, with target completion by year-end.
- Malaysia & South Asia: Malaysia has finalised the Terms of Reference (ToR) for a 20-chapter FTA, with first-round talks scheduled for 27–29 October in Dhaka. Bilateral preferential trade agreement (PTA) draft texts have been exchanged with Nepal, alongside ongoing trade expansion efforts with Bhutan under a 2020 PTA.
Extension request under review
Bangladesh formally submitted its request for a three-year LDC graduation extension to the United Nations Committee for Development Policy (UN-CDP) on 18 February. The application remains under review.
Graduating from LDC status will trigger the withdrawal of preferential tariff access and duty-free benefits across major global markets. Exporters warn this shift will directly impair price competitiveness and squeeze export growth. In response, the government is framing a ‘Trade Negotiating Pool’ and a market-access roadmap to prioritise key markets and establish clear timelines.
Navigating US market uncertainties
Preserving access to the United States, Bangladesh’s largest single-country export destination, remains a top priority. Exports to the US reached $9.05 billion in FY26, up 4.09% year-on-year.
However, market terms remain fluid. A reciprocal trade agreement signed on 9 February set a 19% tariff on Bangladeshi goods in exchange for preferential access for US industrial and farm goods. While initial discussions included zero-tariff treatment for specific Bangladeshi textile quotas, those provisions are currently inactive, leaving average garment tariffs at 25.62%.
Both the Commerce Ministry and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) view ongoing engagement as vital to maintaining access. Additionally, the Office of the US Trade Representative (USTR) is considering a three-year tariff-rate quota for Bangladesh, Cambodia, Indonesia, and Malaysia, which could exempt products containing US cotton and textile inputs from Section 301 tariffs.
Experts urge strategic discipline
Trade analysts and business leaders warn that multiplying trade agreements will not yield automatic dividends without a cohesive strategy.
Dr Mohammad Abdur Razzaque, Chairman of Research and Policy Integration for Development (RAPID), cautioned that Bangladesh must evaluate the cost-benefit balance of every deal:
- EU Priority: Securing an EU arrangement is vital, as losing preference could put nearly half of Bangladesh’s export basket under strain.
- Selective Focus: A deal with Singapore yields limited added value since it already imposes zero tariffs on most goods. Similarly, a standalone FTA with Malaysia may prove redundant if Bangladesh successfully joins RCEP.
Adding to this perspective, Abul Kasem Khan, former president of the Dhaka Chamber of Commerce and Industry (DCCI), emphasised that trade deals alone cannot substitute for structural reform:
“Low-cost labor is no longer a sufficient competitive edge. Bangladesh needs a comprehensive roadmap addressing supply chain efficiency, logistics, energy security, and workforce upskilling. Despite years of debate, meaningful export diversification has lagged, we must fix underlying operational bottlenecks and modernize our foreign investment strategy.”
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