CEPA marks trade milestone with South Korea
Bangladesh and South Korea on Tuesday concluded negotiations on a Comprehensive Economic Partnership Agreement (CEPA), paving the way for preferential market access for thousands of products and marking a significant step in Bangladesh’s trade diplomacy as it prepares for graduation from Least Developed Country (LDC) status.
Under the agreement, around 97 per cent of Bangladeshi products will receive preferential tariff treatment in the South Korean market, while 87 per cent of South Korean exports to Bangladesh will enjoy similar benefits.
Announcing the conclusion of the negotiations, Commerce Minister Khandakar Abdul Muktadir described the agreement as a landmark achievement and Bangladesh’s first comprehensive free trade deal under the current government.
“We concluded a trade agreement with one of the world’s largest economies in a very short time.
This is our first comprehensive free trade agreement within five months of taking office,” he told a press briefing.
Once the agreement comes into force, 8,428 Bangladeshi products will receive immediate duty-free access to the South Korean market.
Bangladeshi exports, including ready-made garments, leather goods and jute products, will benefit from preferential tariff treatment, while 87 per cent of South Korean exports—including agricultural products, plastics and industrial spare parts—will receive comparable market access in Bangladesh.
The commerce minister said the agreement would elevate South Korea, whose economy is valued at nearly US$2 trillion, as one of Bangladesh’s key trade partners.
“We want Bangladesh to become a US$1 trillion economy by 2034. To achieve that, we need 8 per cent economic growth, which requires more foreign investment. Agreements like this will help attract it,” Muktadir said.
South Korean Trade Minister Yeo Han-koo said the two countries had built strong economic ties over the past five decades, initially through cooperation in the textile sector, but stressed the importance of expanding trade beyond traditional products.
He expressed hope that Bangladesh’s new government would further strengthen the country’s economy and said South Korea was keen to deepen cooperation in technology, investment and resilient supply chains.
According to Bangladesh’s Ministry of Commerce, bilateral trade has grown steadily in recent years, although the overall volume remains modest.
Two-way trade currently stands at about US$1.39 billion, with Bangladesh exporting goods worth US$491.73 million and importing US$902.9 million from South Korea, resulting in a trade deficit of around US$411 million.
Beyond merchandise trade, the agreement also provides significant market access in services.
Bangladesh will open 95 service sub-sectors to South Korean providers, while South Korea will grant Bangladesh access to 111 sub-sectors across four modes of service delivery.
Officials expect the arrangement to facilitate technology transfer, investment and greater participation by Bangladesh’s skilled workforce.
Preparatory work for the agreement began with the finalisation of the Terms of Reference, followed by the establishment of 11 Technical Working Groups under a Trade Negotiating Committee.
The first round of negotiations was held in Seoul from 22 to 27 August 2025. Over the following year, the two sides completed five formal rounds of negotiations—three in South Korea and two in Bangladesh—as well as around 40 virtual meetings between the chief negotiators.
Bangladesh currently exports ready-made garments, home textiles, leather goods, footwear, pharmaceuticals, jute products, frozen foods and ceramics to South Korea.
Its imports from South Korea include industrial machinery, iron and steel, electrical equipment, plastics, chemicals and paper products.
Officials said the CEPA is expected to strengthen bilateral trade, promote industrialisation, attract foreign investment and generate employment, while helping Bangladesh maintain its global trade competitiveness after its graduation from LDC status.
