Bangladesh pivots to Asia, seeks stronger trade ties amid global shifts

Facing evolving global trade dynamics and uncertainties in traditional export destinations, Bangladesh has launched a strategic initiative to diversify its export markets by strengthening economic ties with Asian nations.

As part of this strategy, the government is initiating a series of Joint Economic Commission (JEC) meetings with key Asian economies. The aim is to enhance bilateral trade, attract greater investment, and prepare proactively for the challenges of the post-Least Developed Country (LDC) transition.

According to officials at the Economic Relations Division (ERD), the government intends to expand into alternative markets beyond the United States and the European Union. This move comes as tariff reforms in the US and the potential risks associated with LDC graduation could negatively impact Bangladesh's exports.

Initial plans include JEC meetings with China, Pakistan, Singapore, Indonesia, Vietnam, Malaysia, and other member states of the Association of Southeast Asian Nations (Asean).

Officials confirmed that a JEC session with China is scheduled for 1 June, with Beijing having already confirmed its participation. Pakistan is expected to hold its JEC meeting with Bangladesh in July, marking a resumption after the last such meeting in 2004.

Letters of invitation have been sent to Singapore and Indonesia, while similar invitations to Malaysia, Vietnam, Thailand, and the Philippines are in progress, officials stated.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), commented, "This is a timely move, given our significant reliance on North America for exports. Strengthening collaboration with Asian nations is crucial for effectively addressing post-LDC challenges."

He, however, cautioned, "These initiatives often fall short of their potential without effective follow-through. The outcomes must be tangible, resulting in expanded markets and increased investment."

The economist also emphasised the need for Bangladesh to explore alternative import sources and foster financial cooperation with these Asian countries, particularly in securing loans with favourable terms. "This approach could generate multifaceted positive impacts on our economy," he added.

China JEC

"China and the ASEAN region present immense trade potential, and these countries could become significant export destinations for Bangladesh," stated a senior ERD official. "As part of our strategy, we are working to finalise the agenda for the China JEC, with a primary focus on expanding trade, especially increasing our exports."

In preparation for the upcoming meeting with China, an inter-ministerial session, chaired by ERD Additional Secretary and Wing Chief (Asia & JEC) Mirana Mahrukh, will be held tomorrow.

Discussions will centre on finalising Bangladesh's proposals, which include increasing exports of mangoes and jackfruit to China, attracting more Chinese investment in development projects, and exploring more favourable loan terms from China. E-commerce cooperation will also be on the agenda.

China has confirmed the attendance of its commerce minister and a delegation of 100-150 business representatives at the June meeting. Bangladesh's economic and commerce advisers will lead the country's delegation.

Furthermore, recent developments indicate Bangladesh's growing interest in securing long-term trade benefits with China. During the chief adviser's visit to China, Beijing agreed to extend Bangladesh's duty-free export access until 2028.

However, international trade analyst and RAPID Chairman MA Razzaque cautioned that Bangladesh must enhance its export and investment capacities to fully capitalise on this extension.

"As the world's largest trading economy, China offers significant opportunities. To maximise benefits from duty-free access, Bangladesh should consider formalising a trade agreement with China," Razzaque added.

Diplomatic outreach

Bangladesh has also engaged with Singapore, which has expressed interest in supporting Bangladesh in areas such as digital payment systems, tax collection, banking sector reform, innovative financing, capital and bond markets, logistics, ports, and multimodal transport.

Singapore has also indicated interest in investing in Bangladesh's healthcare sector and facilitating easier access to healthcare in Singapore for Bangladeshi citizens.

In Indonesia, Bangladesh is exploring opportunities to export halal products and collaborate on green financing, ERD officials confirmed.

Meanwhile, Chief Adviser Muhammad Yunus recently sought Indonesia's support for Bangladesh's bid to join ASEAN during a farewell meeting with Indonesian Ambassador Heru Hartanto Subolo. He also advocated for expanding business opportunities for Bangladeshis in Southeast Asia.

At a CPD dialogue on 17 April, its Chairman Rehman Sobhan emphasised the urgency of diversifying export markets in the face of global uncertainties stemming from the US tariff policy.

"We must explore alternatives. Asia is poised to become the epicentre of global economic growth over the next 25 years. Bangladesh should strategically position itself within this shift," he asserted.

Sobhan also recommended strengthening Bangladesh's market presence in the European Union, where tariff-free access continues for several more years. "Furthermore, exploring markets in Canada, Australia, Japan, and Asia, which will become the primary hub of economic growth in the next 25 years, is essential," he said.