Garment exporters in Bangladesh are hailing the country’s economic partnership agreement (EPA) with Japan as a landmark and timely development that could significantly expand their apparel shipments to one of the world’s largest clothing markets.
Industry people expect the deal to lift exports to Japan by at least 10 per cent in the coming years, as it guarantees uninterrupted duty-free access and removes tariff uncertainties ahead of Bangladesh’s graduation from least developed country (LDC) status.
Bangladesh signed its first-ever EPA with Japan in Tokyo on 6 February, with Commerce Adviser Sheikh Bashir Uddin and Japan’s State Minister for Foreign Affairs Horii Iwao inking the deal.
The agreement was reached after seven rounds of negotiations, covering trade in goods and services.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said in a statement on Saturday that the deal is both “strategic and essential” for safeguarding Bangladesh’s export competitiveness after LDC graduation.
Japan is the world’s second-largest apparel importer after the United States, with annual global imports valued at around $23 billion.
Still, Bangladesh’s garment exports to Japan remain modest at present. In fiscal year 2024-25, the country shipped garments worth $1.41 billion to Japan, accounting for only about 3 per cent of the total apparel exports.
Exporters said this low share leaves substantial room for growth.
“With the EPA in force, increasing Japan’s share to at least 10 per cent should be a clear strategic objective, particularly as Bangladesh aims for $100 billion in garment exports by 2035,” the BGMEA said.
At present, Bangladesh enjoys duty-free entry to Japan under the Generalised System of Preferences (GSP). However, the facility will end after LDC graduation, exposing exporters to most-favoured nation tariffs ranging from 8-15 per cent on knitwear and 10-15 per cent or more on woven garments.
The EPA locks in full duty-free treatment for garment products from the date the agreement takes effect, eliminating the risk of higher tariffs.
The BGMEA said the agreement includes flexible rules of origin that will benefit local manufacturers.
Under the provision, garments made through single-stage processing will qualify for duty-free access – a system exporters say simplifies compliance and reduces costs.
“This flexibility will help maintain competitiveness and make it easier for manufacturers to meet requirements,” it added.
The BGMEA also believes the EPA will help diversify exports and attract greater Japanese investment, buyers and machinery suppliers, strengthening long-term industrial cooperation between the two countries.
Japan has long been Bangladesh’s largest development partner and top source of official development assistance, supporting major infrastructure and industrial projects.
Bangladesh currently runs a trade deficit of around $456 million with Japan, which policymakers hope will narrow as exports grow.
With the Japan pact secured, attention has now shifted to Bangladesh’s largest export destination – the United States.
Dhaka and Washington have been negotiating tariff arrangements for more than six months, and officials expect a formal trade agreement will be signed soon.
The BGMEA said concluding a US deal quickly is crucial for sustaining export momentum, especially proposals that could allow zero-tariff access using American cotton.
They argue that preferential agreements with key markets are no longer optional as Bangladesh prepares for LDC graduation.
“With duty-free benefits gradually phasing out, such bilateral trade deals are essential for protecting our competitiveness and sustaining export growth,” the BGMEA said.
