US may cut reciprocal tariffs on Bangladesh by next week: Lutfey Siddiqi

Highlights

• The US may cut its 20% tariff on Bangladesh within days, signalling easing trade barriers
• EU FTA talks continue, though progress may be slow due to the bloc's focus on other partners
• A Japan economic partnership deal could be signed within weeks with post-LDC duty-free benefits
• Bangladesh is being urged to prioritise bilateral trade deals to stay competitive globally

The United States may announce a reduction in the reciprocal tariffs imposed on Bangladeshi goods within days, signaling a possible easing of trade barriers between the two countries, Chief Adviser's Special Envoy on International Affairs Lutfey Siddiqi said.

Briefing the media today (27 January) at the Foreign Service Academy on Bangladesh's engagements at the World Economic Forum (WEF) annual meeting in Davos, Lutfey said Washington has shown sincerity in lowering tariffs and an announcement could come by the end of this week or early next week.

"The intention on the US side is clear. We expect a positive decision soon," he said, adding that it is still uncertain how much of the existing 20% reciprocal tariff will be reduced.

Lutfey said he discussed the issue on the sidelines of the Davos conference with US Treasury Secretary Scott Bessent, a member of President Donald Trump's Cabinet.

He noted that several elements of the US non-tariff policy align with the reform agenda of Bangladesh's interim government, while Bangladesh's trade deficit with the US previously around $6 billion has declined significantly. "Considering these factors, the US is showing openness to easing trade barriers on Bangladesh," he said.

EU FTA talks face slow progress

On Bangladesh-European Union trade relations, Lutfey said discussions were held with EU Commissioners Roxana Mînzatu and Jozef Síkela regarding a possible Free Trade Agreement (FTA).

"Bangladesh has clearly expressed its interest in an FTA, and the EU has shown willingness. However, their process is slow," he said.

He pointed out that the EU is currently prioritising FTA negotiations with India and may turn its focus to Vietnam next, which could delay progress with Bangladesh. "There is no reason to panic, but discussions must continue. I will leave detailed notes on this issue for the next government," he added.

Lutfey also warned that securing GSP Plus benefits in the EU market after Bangladesh's graduation from least developed country (LDC) status will be challenging. He cautioned that excessive export concentration – particularly the dominance of garment exports – could put Bangladesh at risk of losing GSP Plus eligibility in the future.

Shift towards bilateral trade deals

Referring to his discussions with World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala, Lutfey said Bangladesh has been advised to gradually move beyond heavy reliance on multilateral trade arrangements and focus more on bilateral trade agreements.

"In the future global trade environment, it will be difficult to remain competitive without FTAs or EPAs," he said.

In this context, Lutfey said talks with Japan on an Economic Partnership Agreement (EPA) were productive. Japanese Minister of Economy, Trade and Industry Akazawa Ryosei informed him that a formal agreement could be signed within the next one to two weeks.

He added that Bangladesh would enjoy duty-free access to the Japanese market for three years after LDC graduation.

Lutfey said FTA discussions are ongoing with South Korea, while negotiations with Singapore are at an advanced stage.

Regional cooperation, Rohingya issue

Lutfey said talks with Thai Foreign Minister Sihasak Phuangketkewo focused on potential Thai investment in Bangladesh's food processing sector and the use of Thai ports to enhance bilateral trade.

On the Rohingya crisis, he said the issue was discussed with UN Special Envoy on Myanmar Julie Bishop. "Global geopolitics surrounding Myanmar is becoming increasingly complex. Bangladesh must remain focused on its legitimate demands," he said.

Migration, diplomatic recalibration

Highlighting discussions with IOM Director General Amy Pope, Lutfey said Bangladesh is working to change the international perception that it is indifferent to illegal migration.

"Last month, 600 holders of fake visas were sent back from Singapore. This time, with CID support, legal action will be taken against all of them," he said.

Stressing the need for a shift in diplomatic strategy, Lutfey said symbolic gestures such as signing MoUs or photo opportunities are no longer sufficient.

"Bangladesh must make itself more relevant globally. Corridor diplomacy and issue-based negotiations should be prioritised to clearly present our positions to the world," he added.

Bangladesh engages Meta to curb election-time disinformation

Lutfey Siddiqi said Bangladesh has engaged Meta, the parent company of Facebook, at the highest level to counter misinformation and disinformation ahead of the upcoming general election and the referendum scheduled for 12 February.

He said the engagement took place on the sidelines of the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, where Lutfey met senior Meta leadership to discuss measures to safeguard the electoral process from online manipulation.

"On the sidelines of the WEF meeting, I held a meeting with Facebook, now Meta, at the highest level, particularly focusing on how Meta can act against disinformation and misinformation ahead of the upcoming elections," Lutfey said.

Lutfey said discussions focused on both preventive steps before polling and real-time actions during the election period, including coordinated responses to misinformation campaigns and the possibility of restricting or shutting down pages found to be inciting unrest.

He said a high-level protocol is already being developed, and Meta has begun coordinating with the Election Commission. According to Lutfey, Meta's senior leadership is fully aware of the importance of the issue, with its enforcement mechanisms and election-related tools being aligned with the commission's requirements. Workshops on these tools have already been conducted or are underway.

Further discussions are expected in an upcoming meeting involving Faiz Ahmad Taiyeb, Special Assistant to the Chief Adviser for the Ministry of Posts, Telecommunications and Information Technology.