FTA push gains EU backing

The European Union has welcomed Bangladesh’s efforts to deepen economic ties with the bloc and urged swift progress on a proposed Airbus aircraft deal with Biman Bangladesh Airlines, as Dhaka said it had resolved 48 of 61 trade barriers identified by the EU ahead of formal negotiations on a free trade agreement (FTA).

EU Ambassador and Head of Delegation Michael Miller said Airbus had presented a highly competitive offer and expressed hope that negotiations between Airbus and Biman would be concluded quickly.

“In our view, Airbus has an incredibly competitive offer. It should be taken very seriously, and we look forward to the very swift concluding of negotiations between Airbus and Biman,” Miller said.

His comments came as Bangladesh seeks to modernise the fleet of its national flag carrier amid competition between Airbus and Boeing.

Biman signed a $3.7 billion agreement with Boeing on April 30 to purchase 14 aircraft, with deliveries scheduled in phases between 2031 and 2035.

Bangladesh had earlier expressed interest in purchasing 10 Airbus aircraft.

Commerce, Industries, Textiles and Jute Minister Khandaker Abdul Muktadir said the government had resolved 48 of the 61 non-tariff barriers raised by the EU, with the remaining 13 being addressed.

He made the remarks on Sunday at a joint press briefing at the Commerce Ministry following a meeting with Ambassador Miller and representatives of the EU’s 27 member states.

Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir, State Minister for Foreign Affairs Shama Obaid, State Minister for Planning Zonayed Abdur Rahim Saki and senior officials attended the meeting.

Trade barriers eased
Muktadir said an EU delegation led by Miller had identified a number of specific trade obstacles during a meeting with the government in March, shortly after the new administration took office.

Since then, the government has worked with the National Board of Revenue (NBR), as well as the agriculture, fisheries and livestock, and shipping ministries, to address the concerns.

Among the measures already implemented was the removal of complications related to renewing licences for wholly foreign-owned logistics companies.

The government has also doubled the annual ceiling for importing commercial samples from $10,000 to $20,000 and revised customs valuation procedures for smart cards used to trace export products.

However, significant barriers remain in the shipping sector.
The EU has raised concerns over Bangladesh’s legal requirement that 50 per cent of its seaborne foreign trade cargo be carried by Bangladeshi-flagged vessels.

Muktadir acknowledged that the country currently lacks sufficient shipping capacity to meet the requirement.

The Bangladesh Shipping Corporation operates only seven vessels, while the private sector has around 115.

“It is not practically possible to carry half of Bangladesh’s roughly $130 billion in trade with this fleet,” he said, adding that amendments to the relevant law were being considered.

The government also plans to review requirements for foreign-flagged vessels to obtain prior clearance or waiver certificates before transporting cargo.

Muktadir said Bangladesh needed a long-term strategy spanning five, 10 or 15 years to build up its ocean-going shipping capacity.

FTA talks in sight
The progress on trade barriers comes ahead of formal discussions between Bangladesh and the EU on an FTA and an Investment Protection Agreement.

The negotiations are expected to become increasingly important as Bangladesh prepares for major changes in its trade regime following its graduation from the least developed country (LDC) category.

“We are going to start discussions on a free trade agreement with the European Union. This is very important for Bangladesh’s economy,” Muktadir said.

Miller said the European Commission had responded positively to Bangladesh’s formal proposals for both agreements.

Joint technical discussions could begin as early as this week once the necessary approvals from EU member states are completed, he said.

An FTA could provide Bangladesh with a more predictable framework for maintaining and expanding access to the European market, particularly as some preferential trade facilities associated with LDC status are phased out.

Miller stressed, however, that stronger economic ties would depend on Bangladesh ensuring a transparent, stable and competitive business environment.

He also highlighted the need for transparency and fair competition in public procurement.

Push to defer LDC graduation
Bangladesh has also sought EU support for its proposal to defer its LDC graduation by three years.

The country is currently scheduled to graduate on November 24, 2026, but the government is seeking additional time to prepare for the loss of LDC-specific trade preferences.

Muktadir said recommendations from the UN Committee for Development Policy and the Economic and Social Council on the deferment proposal had been positive.

The proposal is expected to be considered during the 81st session of the UN General Assembly for a final decision.

“We have sought the support of the European Union,” Muktadir said, expressing hope that the bloc would back Bangladesh’s request.

EU support could be significant given the bloc’s central role in Bangladesh’s export economy and its influence over the country’s post-graduation trading environment.

Airbus-Boeing competition
Miller’s remarks on Airbus came as Bangladesh weighs competing offers for the expansion and modernisation of Biman’s fleet.

While Biman has already signed the $3.7 billion Boeing deal for 14 aircraft, Airbus has been seeking to secure a separate order from Bangladesh after Dhaka expressed interest in purchasing 10 aircraft.

The European ambassador’s call for swift negotiations therefore adds a fresh dimension to the increasingly competitive contest between the two major aircraft manufacturers for a share of Bangladesh’s aviation market.

Procurement policy
Asked about Bangladesh’s imports from the United States, Muktadir said the government’s procurement decisions were being guided by national interests rather than pressure from any particular country.

He said purchases of energy products such as liquefied natural gas (LNG) and foodgrains were assessed on factors including price competitiveness, quality and wastage.

“Bangladesh’s trade policy is not driven by the influence of any particular country,” he said, stressing that economic interests and public welfare remained the main considerations.

With most of the EU’s identified trade barriers now resolved, Bangladesh’s immediate task is to address the remaining obstacles and use the forthcoming FTA negotiations to secure predictable and competitive access to its largest export market beyond LDC graduation.