Bangladesh and Japan have completed draft negotiations for their first Economic Partnership Agreement (EPA), with the maiden EPA deal for Bangladesh expected to be signed in January.
It will require approval from the Japanese cabinet and Bangladesh’s Advisery Council, Bangladeshi officials said at a press conference at the secretariate on Monday.
As a least developed country, is entering its maiden EPA with Japan, the world’s fourth-largest economy, a move expected to expand trade, boost investment and create new employment opportunities, they said.
Under the agreement, Bangladesh has agreed to open 97 sub-sectors to Japan, while Japan has decided to open 120 sub-sectors for Bangladesh.
Market access provisions will take effect immediately after signing.
Bangladesh will receive duty-free access to the Japanese market for 7,379 products from the first day of implementation, while 1,039 Japanese products will enjoy immediate duty-free access to the Bangladeshi market.
Despite long-standing friendly relations between the two countries, Japanese investment in Bangladesh remains limited, said Bangladesh Investment Development Authority Executive Chairman Chowdhury Ashik Mahmud Bin Harun.
He said current Japanese investment stands at around $500 million, which is low compared to other destinations.
Large-scale Japanese investment is expected to flow into logistics, electronics, information technology and automobiles once the agreement comes into force, he said.
The deal is also expected to accelerate technology transfer and ease challenges linked to Bangladesh’s graduation from least developed country status.
The Ministry of Commerce said the agreement will cover trade in goods, trade in services, investment, market access, tariff reduction, technology transfer and trade facilitation frameworks, creating an effective free trade environment between the two countries.
Major Bangladeshi export items, particularly ready-made garments and other products, will enjoy duty-free access to the Japanese market from the day the agreement is signed.
The single-stage transformation facility will also be effective for the apparel sector.
Highlighting the importance of preferential trade arrangements, Bin Harun said comparator economy Vietnam has free trade agreements with 30 countries that support its economic growth.
Commerce Adviser Sk Bashir Uddin said a joint announcement on the completion of negotiations for the Bangladesh–Japan Economic Partnership Agreement was made following a telephone discussion with Japan’s foreign minister.
Negotiation history shows steady progress over the past two years. A joint study group formed at the initial stage of the talks published its report on 27 December 2023, recommending a comprehensive negotiation approach covering 17 sectors.
Formal negotiations were jointly launched on 12 March 2024, with the first round of talks held in Dhaka from 19 to 23 May under an agreed work plan. Discussions were later suspended temporarily due to unexpected challenges.
Priority-based negotiations resumed in November 2024 under the interim government, with an ambitious target set to complete the agreement within one year. The EPA text was subsequently finalised through seven rounds of negotiations.
