South Korea is unlikely to provide duty-free and quota-free (DFQF) market access to products from Bangladesh unilaterally after its graduation from the least developed country (LDC) status in 2026.
The East Asian country has already informed the Bangladesh embassy in Seoul informally that it is reluctant to give DFQF access one-sidedly in favour of Bangladeshi goods, according to a letter of the embassy.
The Korean republic is also likely to come under pressure from the countries who signed free trade/preferential trade agreements with the developed country if the facility is given independently to Bangladesh even after its graduation from the LDC club, the letter hinted.
To overcome possible export shocks from the developed market, the embassy has suggested that the government should fix its position and devise next course of action to this effect through conducting a feasibility study with the stakeholders.
On March 31, 2021, the Bangladesh mission requested the Korean trade, industries and energy ministry to form a joint feasibility study team on implementation of the Free Trade Agreement (FTA), but the ministry has not informed the mission as yet regarding the issue.
It emphasised taking a decision as early as possible on FTA/PTA for ensuring trade preference in the market after the LDC graduation in 2026 as any type of trade deal involves a long-term process.
Bangladesh embassy anticipates an adverse impact on Bangladeshi exports to the Korean market as most of the Asian countries already have regional and bilateral agreements with South Korea.
Besides, Bangladeshi products will enter the Korean market as expensive products if it is not given DFQF access by the East Asian country after the LDC graduation.
If the DFQF facility is not continued, it will discourage the Koreans from investing in Bangladesh, it said.
The Bangladesh mission has recommended requesting the Korean authorities to continue DFQF facility for Bangladeshi products until completion of any FTA or PTA with the country. Korea has expanded its DFQF facility for LDCs (least developed countries).
Currently, it provides duty-free market access to Bangladesh in 95 per cent of tariff lines.
Bangladesh and South Korea are the members of the Asia-Pacific Trade Agreement (APTA). Both countries have been maintaining good bilateral trade ties for a long time.
Bilateral trade between Bangladesh and Korea has already crossed US$ 2.0 billion.
Bangladesh's exports to South Korea totalled US$398.66 million in the fiscal year 2020-21, according to the Export Promotion Bureau (EPB).
Realising the urgency, the government is trying to secure duty-free market access to a good number of countries after the LDC graduation as many developed countries will not continue duty-free facility in the post-LDC era, says a commerce ministry official.
"Many countries want to build business relations with us. But we cannot tap the potential for a lack of proactive drive," he adds.
Currently, Bangladesh has achieved DFQF market access from the developed and advanced developing countries as a member of the World Trade Organisation (WTO), which is known as generalised system of preference (GSP) facility.