Bangladesh is optimistic about finalizing a Comprehensive Economic Partnership Agreement (CEPA) with South Korea by the end of the year, with the third round of negotiations set to take place in Seoul today. A delegation from the commerce ministry has departed for South Korea to participate in the discussions. Both countries have been actively negotiating in 13 key areas to pave the way for the CEPA.
The agreement is expected to address not only tariff-related matters but also aspects such as market access for goods, services, rules of origin, economic cooperation, and investment. Over the years, the economic ties between Bangladesh and South Korea have strengthened significantly. Bilateral trade has surpassed $3 billion annually, with Bangladesh exporting goods worth over $2 billion to South Korea. The exports primarily consist of ready-made garments, home textiles, leather products, frozen food, ceramics, pharmaceuticals, jute items, among others.
South Korean investment in Bangladesh has crossed $2 billion, primarily focused on the textile and clothing sector. South Korea holds the distinction of establishing Bangladesh’s first foreign Export Processing Zone. Additionally, South Korea ranks among the top sources of Foreign Direct Investment (FDI) in Bangladesh, particularly in the textile and clothing industry.
Key imports from South Korea to Bangladesh include iron, steel, plastics, machinery, paper products, and tanning extracts. With an Economic Partnership Agreement (EPA) already in place with Japan, Bangladesh sees this as a positive precedent for forging a similar deal with South Korea, according to Commerce Secretary Mahbubur Rahman.
Rahman emphasized the importance of signing trade agreements with major partners as Bangladesh moves towards transitioning from a least developed country (LDC) to a developing nation. The country aims to secure duty-free market access post-LDC graduation. A recent report by the UN Conference on Trade and Development (UNCTAD) warned that Bangladesh could face a potential loss of over $17.5 billion in exports post-LDC graduation.
Since 2008, as an LDC, Bangladesh has enjoyed duty-free-quota-free (DFQF) access to the South Korean market, covering approximately 95% of products under the Asia-Pacific Trade Agreement (APTA) and WTO arrangements.