Bangladesh pursues two-dozen plans to secure duty-free market access

Bangladesh pursues over two-dozen plans to secure duty-free market access to major trade-partner countries for effective graduation from least-developed country (LDC) status, sources say.

The ministry of commerce (MoC) has sketched out the sweeping, time-bound action plan under Monitoring and Evaluation (M&E) Framework.

This comprehensive framework is designed to execute a Smooth Transition Strategy (STS) on graduation.

They say the detailed plan outlines aggressive diplomatic- and trade- negotiation strategies targeting the European Union, the United Kingdom, and key Asian partners like China, Japan and India.

The core of the strategy focuses immediate preservation of preferential access to the European Union (EU) and the United Kingdom (UK), which together account for a vast majority of Bangladesh's ready-made garment (RMG) exports.

The top priority is to secure the next-generation EU GSP+ scheme by December 2027. The scheme is the replacement for the current 'Everything But Arms (EBA)' trade bonanza Bangladesh, as an LDC, currently enjoys.

Regarding the graduation from the world's poor-country club, a massive inter-ministerial and private-sector effort is being continued, involving the ministry of foreign affairs (MoFA), the ministry of labour and employment (MoLE), and powerful industry bodies like BGMEA and BKMEA.

The plan mandates updating the implementation status of 32 GSP-related conventions and strictly monitoring the national labour action plan.

Diplomatic engagement with EU officials and Members of the European Parliament is prioritised to ensure Duty-Free, Quota-Free (DFQF) market access for apparel under the proposed GSP+ continues, alongside the removal of EU safeguard measures on textiles and clothing.

The baseline acknowledges "no formal commitment has yet been secured from the EU to consider Bangladesh's concerns in the proposed GSP scheme, underscoring the high-stakes nature of the negotiations".

In parallel, Bangladesh is pushing the EU and the UK to relax the stringent Rules of Origin (RoO) requirements under the proposed GSP+ and the UK's Enhanced Preference Scheme, targeting completion by December 2026.

The current requirement for apparel, known as "double-stage transformation for RMG and 50-percent value addition for other products enhanced, which are hard for Bangladesh to comply with.

Bangladesh Trade and Tariff Commission (BTTC) is tasked with preparing an in-depth assessment of the knit and woven garment sectors to justify a more flexible RoO that graduating LDCs can easily comply with.

Beyond the EU and UK, the Action Plan details crucial bilateral negotiations to secure transitional DFQF access in line with the WTO General Council's October 2023 decision.

The strategy notes that three-year DFQF extensions have already been confirmed by the EU, the UK, Canada, Australia and Norway.

The commerce ministry is mandated to pursue bilateral negotiations with at least 17 key preference-providing countries-including China, India, Japan, Saudi Arabia, and New Zealand-to secure similar extensions by June 2025.

A specific action is dedicated to assessing the new Canadian General Preferential Tariff (GPT) Plus scheme and preparing a position paper for further negotiations, with a target of December 2026-the set cutoff time for Bangladesh's LDC graduation.

The strategy dedicates separate actions for China, India, Japan and South Korea, aiming for continued preferential market access until long-term free- trade agreements (FTAs) can be finalized.

The commerce ministry is accelerating negotiations to conclude the Japan EPA within 2026.

It is expected to complete FTA/CEPA deals with China and India by June 2027.

The government has sent a letter to accede to the RCEP or Regional Comprehensive Economic Partnership and is preparing position papers to join the vast bloc. No formal talks start.

The ministry continuous efforts to identify and eliminate Non-Tariff Measures imposed by major trading partners, considered a critical step toward "Reduction or elimination of NTMs".

The framework also outlines internal reforms and capacity building to ensure sustainable export growth in a competitive post-LDC world.

Bangladesh is actively pursuing the extension of the TRIPS transition period (flexibility for pharmaceuticals) and waivers granted to LDCs until the originally declared period of extension--a move critical for the domestic pharmaceutical industry.

The country is seeking Net Food-Importing Developing Country (NFIDC) status at the WTO to potentially maintain subsidies on agricultural and food exports after graduation by June 2026 as Bangladesh is not officially classified as NFIDC.

The MoC is tasked with establishing a Trade Negotiators Academy to create a pool of trained officials by December 2026, boosting technical expertise.

Meanwhile, local leading trade organisations have formally urged the government to postpone the country's official graduation from the LDC status, seeking an extension from the scheduled date in 20026 to 2032.

The demand is driven by deep concerns over the potential loss of crucial trade benefits, including DFQF market access, against the backdrop of a deteriorating domestic and global economic situation.

Business leaders warn that the loss of preferential market access is expected to severely impact export-oriented industries, particularly the RMG sector which heavily relies on the DFQF scheme.

They have collectively demanded the transition be pushed back to 2032. This extension, they argue, is necessary to allow the country time to secure new trade deals, diversify its export basket, and undertake essential economic reforms for a smoother, sustainable transition.

The current interim government, which assumed office following a student-people movement on August 5, has taken steps to communicate the business community's anxieties to the United Nations (UN)-the arbiter in the graduation matrix.

While the government has not officially requested a postponement of the 2026 graduation date, it has conveyed the concerns and is actively exploring the possibility of a deferral.

Importantly, the government has requested the UN to conduct an independent assessment of the country's preparedness for LDC graduation.

The interim government is currently engaged in wide-ranging comprehensive reforms. A national election is tentatively scheduled for February next year.

When contacted, commerce secretary Mahbubur Rahman said, "We have sent commerce ministry's action plans according to the prescribed format on smooth LDC graduation to state agencies concerned."

He says the action plans have been designed so that even after Bangladesh's LDC graduation, DFQF benefits continued and the country's export sector is further developed.

rezamumu@gmail.com