EPA talks with Japan to end in August

The negotiation for the signing of an economic partnership agreement (EPA) between Bangladesh and Japan will be completed by the end of August, said Commerce Secretary Mahbubur Rahman yesterday.

After the finalisation of the negotiation, the EPA can be signed soon, he said.

In March last year, Bangladesh began talks for signing the EPA, mainly to secure preferential trade benefits from Japan after the country graduates to a developing nation from the group of least developed countries (LDCs) by November next year.

The secretary, however, said signing any free trade agreement (FTA) with China would not bring any benefit for Bangladesh, as imports from China generated duties of nearly Tk 50,000 crore.

Currently, China is Bangladesh's largest trading partner, as local traders and businesspeople import goods worth over $16 billion a year.

However, exports from Bangladesh to China have been at a very low level for years, hovering around $600 million to $700 million.

Rather, the signing of FTAs with other countries, such as South Korea, the European Union (EU), and African countries, will be much more beneficial, he said.

So, Bangladesh has been negotiating the signing of trade agreements with those countries, he said.

Bangladesh has also been engaged in negotiations to try to convert Trump's reciprocal tariffs into a free trade agreement, the secretary said.

Regarding the country's LDC graduation, the secretary said the deferment of graduation was not possible, although the country would lose preferential trade benefits, as it has already graduated.

The secretary also said that within the next two to three months, the government will issue another 43 lakh new "family cards" to sell select essential commodities at subsidised prices to one crore families.

The commerce secretary was speaking at a dialogue on "Budget FY25–26 in the Context of LDC Graduation," organised by RAPID with support from the UK Foreign, Commonwealth and Development Office (FCDO) at Six Seasons Hotel in Dhaka.

M Abu Eusuf, executive director of the Research and Policy Integration for Development (RAPID) and a professor at the University of Dhaka, moderated the dialogue.

At the discussion, Planning Adviser Wahiduddin Mahmud said the government has recently approved some projects to drill gas fields to meet industrial demand for energy.

He also said the government has continued implementing some important mega projects, although those were taken up by the previous government.

For instance, the government has approved the Bay Terminal at Chattogram, Matarbari power plants, and deep-sea port, as these projects are very much related to trade and business, the adviser also said.

Rubana Huq, vice-chancellor of the Asian University for Women and a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), advocated for the deferment of the LDC graduation, citing that the country needed more preparations for a smooth transition.

BGMEA Vice-President Vidiya Amrit Khan also echoed Huq's views on LDC graduation. Khan also suggested reducing the VAT on the sale of waste from garment manufacturing factories.

Monzur Hossain, member of the General Economics Division, said that if LDC graduation were deferred for two more years, vital economic reforms would be delayed.

A fragile economy is being rebuilt through the restoration of macroeconomic stability, as inflation is gradually declining and the central bank's foreign exchange reserves are also increasing, he said.

Shawkat Hossain Masum, head of online at Prothom Alo, said the investment issue did not prominently feature in the proposed budget for the next fiscal year, as the environment was not conducive for domestic and foreign entrepreneurs to make investments.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that apart from a severe gas crisis, the reduction of incentives for local textile use has been affecting investments in the primary textile sector.

Doulot Akter Mala, president of the Economic Reporters' Forum (ERF), urged the government to provide logistics support for the industrial sector and attract more investment.

In a keynote paper, RAPID Chairman MA Razzaque said the proposed budget reflects the government's efforts to navigate exceptionally challenging macroeconomic conditions amid severe fiscal constraints.

The budget presents an opportunity to align immediate priorities with longer-term goals of competitiveness, diversification, and inclusive development as LDC graduation nears, he said.