Bangladesh and Japan have finalised the draft of a landmark Economic Partnership Agreement (EPA), clearing the way for its signing in January. The agreement marks Bangladesh’s first comprehensive trade and economic partnership pact with any country and is seen as a major step toward securing preferential market access ahead of Bangladesh’s graduation from least developed country status.
The draft EPA was endorsed during a phone conversation between Bangladeshi Commerce Adviser Sk Bashir Uddin and Japan’s Foreign Minister Motegi Toshimitsu. The development was later announced through separate press briefings in Dhaka and Tokyo.
Duty-free access for majority of Bangladeshi exports
Under the agreement, Japan will grant duty-free access to 7,379 Bangladeshi products, covering around 97 percent of Bangladesh’s export basket. In return, Bangladesh will provide duty-free access to 1,039 Japanese products, largely in phases over an 18-year period.
A major highlight of the EPA is the inclusion of ready-made garments, Bangladesh’s top export item. RMG products will enjoy duty-free access to the Japanese market from the first day of implementation. The agreement also introduces Single Stage Transformation provisions, easing rules of origin requirements and strengthening Bangladesh’s competitiveness in Japan.
Services, investment, and workforce mobility included
Beyond goods trade, the EPA includes a comprehensive chapter on services. Bangladesh has agreed to open 97 service sub-sectors to Japan, while Japan will open 120 sub-sectors to Bangladesh across four modes of supply. Officials believe this reciprocal access will expand opportunities for Bangladeshi service providers and encourage Japanese firms to invest more actively in Bangladesh.
The agreement also contains provisions on investment, human resources, and movement of natural persons, which policymakers say will support technology transfer, skills development, and long-term economic cooperation.
Years of negotiation lead to breakthrough
At a press conference at the commerce ministry, Bashir Uddin said eight rounds of negotiations were held before finalising the draft. The talks were guided by a joint study report released in December 2023, which recommended integrated negotiations across 17 sectors.
After facing temporary delays, negotiations resumed on a priority basis, reflecting the government’s urgency to conclude the agreement before Bangladesh’s LDC graduation. Officials now expect the EPA to be signed by the end of January, subject to formal approvals.
The final text will be sent to Japan’s National Parliament, the Diet, and Bangladesh’s advisory council for approval before it comes into force.
Boosting investment ahead of LDC graduation
Speaking at the same event, Chief Adviser’s Special Envoy on International Affairs Lutfey Siddiqi said concluding such a comprehensive agreement was a challenging task, especially as Bangladesh had no prior experience with full-scale economic partnership negotiations. He expressed confidence that the EPA would deliver tangible gains in trade and investment.
Bangladesh Investment Development Authority Executive Chairman Chowdhury Ashik Mahmud Bin Harun noted that Japanese investment in Bangladesh currently stands at around $500 million, a relatively small share of Japan’s global outbound investment. He said the absence of a structured trade framework had long discouraged larger Japanese investments.
“The EPA can change that,” he said, adding that it could open doors for greater Japanese involvement in sectors such as logistics, electronics, information technology, and automobiles.
A new chapter in Bangladesh’s trade policy
The Bangladesh-Japan EPA will be the country’s first full-fledged trade agreement. So far, Bangladesh has signed only one preferential trade agreement, with Bhutan in December 2020, despite holding talks with more than a dozen trading partners.
Officials described the conclusion of the EPA draft as a turning point in Bangladesh’s trade diplomacy, positioning the country to better protect its export competitiveness, attract foreign investment, and navigate the challenges of post-LDC graduation.
