Bangladesh is looking forward to finalizing a Comprehensive Economic Partnership Agreement (CEPA) with South Korea by the end of the year as negotiations enter the third round in Seoul today.
A team from the commerce ministry has departed for South Korea to participate in the talks. The discussions between Bangladesh and South Korea encompass 13 sectors crucial for the CEPA agreement, covering aspects such as tariffs, market access for goods, services, rules of origin, economic cooperation, and investment.
The economic ties between the two countries have significantly strengthened in recent times. The annual bilateral trade has surpassed $3 billion, with Bangladesh’s exports to South Korea exceeding $2 billion, mainly comprising apparel, home textiles, leather products, frozen food, ceramics, pharmaceuticals, jute items, among others.
Furthermore, South Korean investments in Bangladesh have reached over $2 billion, primarily in the textile and garment industry. South Korea holds the distinction of establishing Bangladesh’s first foreign-exclusive Export Processing Zone and is a leading source of Foreign Direct Investment (FDI), particularly in the textile sector.
Bangladesh’s major imports from South Korea include iron and steel, plastics, machinery, paper products, and tanning extracts.
Commerce Secretary Mahbubur Rahman highlighted that with the successful signing of an Economic Partnership Agreement (EPA) with Japan, Bangladesh has a positive precedent in negotiating with major trading partners, making the CEPA with South Korea a feasible endeavor given the expressed interest from both sides.
With Bangladesh’s impending transition from a least developed country (LDC) to a developing nation, it faces potential duty implications due to losing preferential market access. Hence, securing trade agreements with key trading partners is crucial for Bangladesh to maintain duty-free market access post-LDC graduation.
A recent UN Conference on Trade and Development (UNCTAD) report warned that Bangladesh could face a loss of over $17.5 billion in exports post-LDC graduation. As an LDC, Bangladesh has enjoyed duty-free access to the South Korean market for nearly 95% of products under the Asia-Pacific Trade Agreement (APTA) and World Trade Organization (WTO) arrangements since 2008.
