Bangladesh, Japan finalise first-ever economic partnership agreement draft

Bangladesh and Japan have finalised the draft of a landmark Economic Partnership Agreement (EPA), paving the way for its signing next month, Commerce Adviser Sheikh Bashir Uddin said on Monday. 

The agreement, once signed, will mark Bangladesh’s first-ever economic partnership pact with any country and is expected to significantly deepen bilateral trade, investment and economic cooperation between the two nations.

Speaking at a press conference at the Ministry of Commerce on the Bangladesh-Japan EPA negotiations, Bashir Uddin said he had discussed the matter with Japanese Foreign Minister Motegi Toshimitsu over the phone earlier in the day. “The EPA will be signed next month,” he said, adding that the draft text had been finalised after intensive and sustained negotiations between the two sides.

Under the agreement, Bangladesh has agreed to open 97 sub-sectors to Japan in the services sector, while Japan will open 120 sub-sectors to Bangladesh across four modes of services. Bashir Uddin said the reciprocal market access commitments are expected to encourage greater Japanese investment in Bangladesh and facilitate technology transfer, while also expanding opportunities for Bangladeshi service providers in Japan.

Commerce Secretary Mahbubur Rahman said the negotiation process formally began at the end of 2024 and was concluded after seven rounds of talks. The process followed a joint study report released by both countries on December 27, 2023, which recommended integrated negotiations covering 17 sectors. Formal negotiations were announced on March 12, 2024, with the first round held in Dhaka in May that year. After a brief suspension due to unforeseen challenges, the interim government resumed the talks in November 2024 on a priority basis, setting an ambitious target to complete the agreement within a year.

Chief Adviser’s Special Envoy on International Affairs Lutfey Siddiqi said Bangladesh had never entered into such a comprehensive economic agreement before and initially lacked experience in handling negotiations of this scale. “Through sincere efforts from everyone involved, we have managed to complete it. Undoubtedly, this is a good agreement for Bangladesh,” he said.

Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun noted that although Bangladesh has long enjoyed friendly relations with Japan, Japanese investment in the country remains relatively low at around $500 million. He said the absence of a structured economic agreement in the past often discouraged larger Japanese investments. “We are often compared with Vietnam, which has agreements with around 30 countries. We are just starting, but this journey will allow us to sign many more economic agreements in the future and help address challenges related to LDC graduation,” he said.

Ashik Mahmud added that Japanese investment, which had previously been concentrated in a limited number of sectors, is now expected to expand into areas such as logistics, electronics, information technology and automobiles. This, he said, would accelerate both investment inflows and technology transfer.

Officials said the EPA is expected to bring wide-ranging trade and economic benefits for Bangladesh, including expanded trade, increased foreign investment and new employment opportunities. Once the agreement comes into effect, Bangladesh will enjoy immediate duty-free access to the Japanese market for 7,379 products from the first day of signing. In return, Japan will receive immediate duty-free access to Bangladesh’s market for 1,039 products.

A key feature of the agreement is that Bangladesh’s major export items, particularly ready-made garments, will receive duty-free access to the Japanese market from the outset. The RMG sector will also benefit from Single Stage Transformation provisions, strengthening Bangladesh’s competitiveness in the Japanese market.

Officials emphasised that the conclusion of negotiations at the negotiator level represents a major milestone in Bangladesh-Japan economic relations. The agreement will come into force after receiving approval from the advisory councils or cabinets of both countries and completion of the necessary legal procedures, opening what officials described as a new chapter in bilateral economic cooperation.