EU FTA crucial before LDC graduation
Bangladesh is stepping up efforts to secure continued preferential market access ahead of its graduation from the Least Developed Country (LDC) category in 2029, with negotiations for a Free Trade Agreement (FTA) with the European Union expected to begin soon, Commerce Minister Khandaker Abdul Muktadir has said.
The minister expressed confidence that Bangladesh could reach an understanding with the EU, its largest export destination, on an FTA before graduation.
If that proves impossible, the government will seek a preferential trade agreement to preserve the market benefits Bangladesh currently enjoys, he said.
“If that is not possible, there will be an initiative to maintain current market benefits through a preferential trade agreement,” Muktadir said at a seminar titled “Trade Expansion and Investment Potential in Bangladesh”, organised by the Bangladesh Consulate General in Hong Kong yesterday.
Bangladesh is pursuing trade agreements with a number of countries to cushion the impact of losing LDC-specific trade preferences after graduation in 2029.
Economic partnership agreements have already been signed with Japan and South Korea, while FTA negotiations are under way with around 13 other countries.
The minister also identified high logistics costs as a major obstacle to improving Bangladesh’s investment climate.
The country’s supply-chain costs are estimated at around 16 per cent of GDP, compared with a global average of roughly 10 per cent.
He said the gap needs to be narrowed by reducing transport, production and import-export costs while ensuring policy stability, automating customs procedures and simplifying the process of starting a business.
Muktadir said the government was also working to expand Chattogram Port’s capacity by bringing in international operators and to develop the Matarbari deep-sea port.
Such infrastructure improvements would help reduce cargo transportation and port-management costs, he said.
On business start-ups, the minister said it currently takes up to several hundred days for a new business to reach the stage of opening a letter of credit.
The entire process is being digitised, with the aim of reducing the period to a maximum of 14 days.
Various other business procedures, including trade licences and share transfers, are also being digitised to reduce the need for entrepreneurs to visit government offices.
Customs reform is another priority. Muktadir said automation would reduce cargo-clearance time and costs for importers, while a risk-based customs management system would minimise unnecessary physical inspections of established and compliant businesses.
He assured businesses that unnecessary customs restrictions and procedures would be significantly eased within the next six months to a year.
The minister also identified ship recycling as a promising area for investment, noting that Bangladesh and India together account for around 90 per cent of global ship recycling.
He said there was scope for further investment in the sector, particularly in Bangladesh’s coastal areas.
Meanwhile, Bangladesh plans to send a trade delegation to Sri Lanka to assess opportunities for exporting potatoes and explore prospects for onion exports.
The issue was discussed at a bilateral meeting between Muktadir and Sri Lankan Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe on the sidelines of the 11th Belt and Road Summit 2026 in Hong Kong yesterday.
Samarasinghe expressed interest in importing potatoes and onions from Bangladesh, saying stronger regional trade would produce positive outcomes for people across the region, according to a Bangladesh Commerce Ministry press release.
