Bangladesh is preparing to join the China-led Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement, as it advances efforts to secure broader market access and investment opportunities.
The RCEP Secretariat has sent a second round of questions to Bangladesh, seeking detailed information on trade, investment policies, governance, and regulatory frameworks. Officials said Bangladesh will submit its responses by May 8.
The queries focus on:
- Foreign direct investment policies
- Liberalization of trade in services
- Intellectual property rights (IPR)
- E-commerce regulations
- Transparency and good governance mechanisms
To prepare the responses, an inter-ministerial meeting chaired by Commerce Minister Khandaker Abdul Muktadir was held, gathering input from relevant government agencies.
Policy Decisions
- IPR Transition Period: Bangladesh plans to request a 10–15 year exemption period to comply with intellectual property rules.
- Service Sector Investment: The Bangladesh Investment Development Authority (BIDA) will determine the limits for opening service sectors to foreign investment.
- E-commerce Measures: Discussions include duty exemptions on digital product imports.
Expected Economic Benefits
Government assessments indicate that joining RCEP could raise Bangladesh’s GDP by 0.26%. However, without stronger competitiveness, the services, investment, and e-commerce sectors could encounter significant difficulties.
A 2024 assessment found that if Bangladesh joins RCEP, its exports would increase by $3.26 billion and foreign direct investment (FDI) would rise by 3.36%. A significant portion of the export growth would come from the garment industry, where demand for both skilled and unskilled workers is expected to increase by 18%.
Challenges and Risks
Officials from the Ministry of Commerce said that the objective of RCEP agreement is to create a modern and comprehensive economic partnership by gradually eliminating tariff and non-tariff barriers on goods, services, and investment.
For this reason, RCEP wants to assess how capable Bangladesh is in areas of inclusive development such as trade, investment, intellectual property, e-commerce, as well as SME and technical cooperation.
Officials noted that Bangladesh has limitations and gaps in several areas compared to RCEP commitments. In particular, the country is not yet fully prepared to comply with intellectual property rights (IPR) requirements. Therefore, Bangladesh plans to request a specific transition period or exemption from RCEP in this regard.
In addition, there are weaknesses in foreign investment approval processes, capital regulations, and infrastructure in service trade sectors such as information technology, transport, and tourism. If Bangladesh joins the trade bloc, it has pledged to gradually implement necessary reforms to address these shortcomings.
Background
RCEP was launched in November 2020 and includes 15 countries: the 10 ASEAN members along with China, Japan, South Korea, Australia, and New Zealand. Bangladesh applied to join in 2024, but progress slowed due to political changes and instability.
A Commerce Ministry official said that after graduating from least developed country status, Bangladesh has to pursue bilateral trade agreements to secure tariff benefits, which are complex and time-consuming. In addition, joining the China-led 15-member trade bloc, the Regional Comprehensive Economic Partnership (RCEP), would create opportunities to ensure trade advantages across many countries. For this reason, the elected government has decided to move forward with the next steps toward joining the bloc. In this context, RCEP has sent a second round of questions to the government.
Bd-pratidin English/ ANI
