Bangladesh to sign FTA with EU by 2029

Bangladesh has begun the process of signing a free trade agreement (FTA) with the European Union (EU) by 2029 to remain competitive in global trade, said Commerce Secretary Mahbubur Rahman.

He was speaking as special guest at a seminar titled "Bangladesh–US Tariff Deal: How to Optimise Trade Benefit" at the Bangladesh Institute of International and Strategic Studies (BIISS) auditorium on Wednesday.

Bangladesh will graduate from the Least Developed Country (LDC) category in November 2026. The EU has granted a three-year extension of duty-free access, but from 2029 Bangladeshi exporters will face a 12% tariff unless an FTA is signed.

India and Vietnam—Bangladesh's key competitors—have already signed FTAs with the EU. Meanwhile, Dhaka has sought GSP Plus status, which requires ratification of 32 international conventions on good governance, labour rights, human rights, and environmental protection.

Responding to a question from BGMEA Senior Vice President Inamul Haq Khan about private sector exclusion from tariff talks with the United States, the commerce secretary said the US had insisted on negotiations only with government officials.

He added that he had met leaders of BGMEA, BTMA, BKMEA, MCCI, FBCCI, and DCCI in April after the US announced reciprocal tariffs, including 37% on Bangladeshi goods. The US president at the time announced tariffs of 26% on India, 34% on China and 20% on the EU.

Bangladesh has also initiated FTA talks with South Asian countries, an Economic Partnership Agreement (EPA) with Japan, South Korea and Singapore, and a preferential trade agreement (PTA) with Sri Lanka. Its first PTA with Bhutan, signed in 2020, doubled bilateral trade to $22.1 million in FY23.

At the BIISS seminar, Special Assistant to the Chief Adviser on Finance Dr Anisuzzaman Chowdhury, attending as chief guest, said Bangladesh had successfully negotiated the US reciprocal tariff down to 20% from 35%, calling it a "historic diplomatic victory".

He said the reduced rate now aligns Bangladesh with Asian competitors such as Vietnam, Cambodia, Indonesia, Pakistan and Sri Lanka, offering scope to expand trade if effectively utilised.

EuroCham Bangladesh, however, urged the government not to discriminate against EU firms while granting concessions to the US. Chairperson Nuria Lopez stressed that the EU remains Bangladesh's largest trading partner, accounting for half of all exports and granting duty-free access since 2001.

She highlighted that Bangladesh enjoys a €20 billion trade surplus with the EU and called for stable energy tariffs and transparent customs reforms to maintain investor confidence.

The seminar featured three presentations by Dr Mahfuz Kabir of BIISS, Professor Golam Rasul of IUBAT, and BGMEA's Inamul Haq Khan. BIISS DG Maj Gen Iftekhar Anis delivered welcome and closing remarks, while Research Director Dr Mohammad Jasim Uddin gave the vote of thanks.