Bangladesh and Japan are signing their first free trade deal

Bangladesh and Japan have been strengthening their economic ties, culminating in the initiation of negotiations for a bilateral Economic Partnership Agreement (EPA) in 2024. This agreement, marking Bangladesh's first free trade agreement with Japan, aims to enhance trade and investment between the two nations.

Diplomatic relations between Bangladesh and Japan date back to February 10, 1972. Over the years, Japan has been a significant development partner for Bangladesh, providing substantial Official Development Assistance (ODA) and supporting various infrastructure projects. In recent years, both countries have sought to elevate their relationship to a strategic partnership, focusing on economic cooperation and regional stability.

Initiation of EPA Negotiations

In March 2024, following the recommendations of a Joint Study Group, the governments of Japan and Bangladesh announced the launch of negotiations for an Economic Partnership Agreement. The study group had concluded that a comprehensive and high-level EPA would strengthen economic relations by expanding trade and investment opportunities. 

Progress of Negotiations

The negotiation process has been structured into multiple rounds:

1. First Round: Held in Tokyo in October 2024, this round focused on establishing the framework for discussions and identifying key areas of interest for both parties.

2. Second Round: Conducted in Dhaka from November 10 to 14, 2024, participants engaged in detailed discussions on trade in goods, rules of origin, customs procedures, investment, and intellectual property. Both sides agreed to continue working towards scheduling subsequent rounds through diplomatic channels. 

3. Third Round: Took place in Tokyo from December 19 to 20, 2024, where negotiators made further progress on rules of origin, customs procedures, trade facilitation, investment, and intellectual property. The parties agreed to coordinate the dates for the fourth round of negotiations through diplomatic channels. 

Significance of the EPA

For Bangladesh, this EPA represents a strategic move to secure market access and diversify its export destinations, especially in light of its anticipated graduation from Least Developed Country (LDC) status in 2026. The agreement is expected to mitigate potential trade challenges post-graduation by ensuring continued preferential access to the Japanese market. 

Japan, on the other hand, views the EPA as a means to strengthen its economic presence in South Asia and secure a reliable trade partner. This aligns with Japan's broader strategy of establishing free trade agreements to enhance economic security and resilience in a complex global trade environment. 

Future Prospects:

As negotiations progress, both countries aim to finalize a comprehensive agreement that addresses various aspects of economic cooperation, including trade in goods and services, investment, intellectual property rights, and trade facilitation measures. The successful conclusion of the EPA is anticipated to further solidify the strategic partnership between Bangladesh and Japan, fostering economic growth and development in both nations.

the ongoing negotiations for the Japan-Bangladesh Economic Partnership Agreement signify a pivotal development in bilateral relations, with the potential to create new economic opportunities and strengthen ties between the two countries.