A Comparative
Analysis of Bangladesh-Japan EPA and Bangladesh-USA RTA
In recent years, Bangladesh has accelerated its efforts
to diversify trade partnerships and secure long-term economic opportunities as
it approaches graduation from Least Developed Country (LDC) status. Two of the
most notable developments in this direction are the newly negotiated trade
arrangements with Japan and the United States. While both agreements aim to
deepen economic engagement and improve market access, their design,
obligations, and long-term implications for Bangladesh differ substantially. A comparative
assessment of the Bangladesh–Japan Economic Partnership Agreement (EPA) and the
Bangladesh–US Reciprocal Trade Agreement (RTA) reveals two contrasting models
of trade cooperation—one emphasizing long-term development partnership and the
other reflecting a more transactional approach to market access.
The Bangladesh–Japan EPA represents a comprehensive
framework designed to strengthen bilateral cooperation across multiple sectors,
including trade in goods and services, investment, intellectual property, labor
standards, and environmental cooperation. Negotiations for the EPA began in
March 2024 and progressed through several rounds of discussions in Dhaka and
Tokyo before reaching agreement. Rather than focusing narrowly on tariffs, the
EPA seeks to build a broad economic partnership that supports Bangladesh’s
structural transformation and post-LDC transition. One of the most significant
provisions of the agreement is the granting of duty-free access for
approximately 7,379 Bangladeshi products to the Japanese market. This
concession could significantly enhance the competitiveness of Bangladeshi
exports, particularly in manufactured goods, by reducing trade costs and
improving price competitiveness.Trade data illustrate the importance of this
opportunity. In the fiscal year 2024–25, Bangladesh exported goods worth about
USD 1.41 billion to Japan, while imports from Japan reached approximately USD
1.87 billion, highlighting a persistent trade imbalance. Hence, by expanding
duty-free access and simplifying rules of origin and tariff procedures, the EPA
could help narrow this gap. However, the realization of these benefits will
depend heavily on Bangladesh’s domestic administrative capacity, particularly
in customs management, certification systems, and export verification
mechanisms.
Beyond trade in goods, the Bangladesh-Japan EPA also
promotes investment and technological cooperation. It provides a transparent
investment framework that ensures equal treatment and protection for investors
from both countries while encouraging greater Japanese investment in
Bangladesh. Moreover, the EPA acknowledges the growing importance of the
digital economy by incorporating provisions related to e-commerce, digital
signatures, online transactions, and personal data protection. These measures
are expected to facilitate technology-driven economic cooperation and
strengthen Bangladesh’s integration into global value chains. Importantly,
unlike temporary preferential arrangements such as generalized system of
preferences (GSP) schemes, the EPA provides a binding and permanent guarantee
of market access, which is particularly valuable as Bangladesh prepares for LDC
graduation.