Govt takes first step to join China-led trade bloc

The commerce ministry on Monday sent a letter of consent to the foreign ministry, requesting Bangladesh's entry into the China-led Regional Comprehensive Economic Partnership (RCEP), the world's largest trade pact.

 

It is the first formal step taken by Bangladesh to join the RCEP, which is a major trade agreement that includes trade in services, investment, economic and technical cooperation, and dispute settlement.

Bangladesh has taken the initiative to join the RCEP mainly because it will lose preferential trade benefits to markets that make up the Association of Southeast Asian Nations (Asean) group once it graduates from the list of least developed countries (LDCs) in 2026.

The 10 Asean nations -- namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- are potential markets for Bangladesh.

Moreover, the RCEP also includes five other countries that have signed the Asean Free Trade Agreement (FTA): China, Japan, South Korea, Australia and New Zealand.

These 15 countries within the RCEP account for 30 percent of global GDP, 31 percent of global foreign direct investment (FDI) and one-fourth of global trade.

"We have sent a letter citing our consent to join the RCEP," a senior officer of the commerce ministry said on condition of anonymity.

Earlier, the office of the chief adviser approved Bangladesh's participation in the RCEP.

The RCEP was formally launched in November 2020 and came into effect in January 2022 before opening up its platform in July of 2023 and allowing other countries to join.

Any developed or developing country as well as LDCs can join as members.

The commerce ministry has already completed the required assessment for joining the RCEP, according to a document from the commerce ministry.

Primarily, it is assessed that Bangladesh's export would increase by $3.26 billion and FDI by 3.36 percent.

The apparel industry will account for a significant portion of the exports while the demand for skilled and unskilled workers in the garment sector will rise by 18 percent, according to the commerce ministry document.

Overall, the country's GDP will increase by 0.26 percent if it joins the RCEP, the document said.

However, if competitiveness is not increased, the services, investment and e-commerce sectors will face numerous challenges.

Since Bangladesh is located in South Asia and is also a member of the Asean Regional Forum, the country will need to negotiate separately with member countries. However, it will also enjoy the benefit of geographical proximity.

As a result, Bangladesh will benefit from the global value chain, the document said.

Another commerce ministry official mentioned that a meeting would be held with Japan in Dhaka next month to initiate formal negotiations to sign an economic partnership agreement (EPA).

Bangladesh and Japan have already completed a joint feasibility study on the EPA.

However, formal negotiations were delayed due to the political transition in Bangladesh in August.

However, the commerce ministry official did not specifically say when the meeting with Japan would take place.

The official also said the commerce ministry has not taken any steps to start formal negotiations on a Comprehensive Economic Partnership Agreement (CEPA) with India.

Bangladesh and India completed a joint study on the CEPA more than two years ago. Both parties are now awaiting the formal launch of negotiations.

He also said that negotiations on a proposed FTA with China are expected to start in the near future.