Bangladesh’s recent economic partnership agreement (EPA) with Japan has sparked a wave of both optimism and concern, leaving many to wonder: Is this a strategic leap forward or a risky gamble for the nation’s future? While business leaders have largely celebrated the deal, trade experts are sounding alarms about potential long-term pitfalls as Bangladesh inches closer to graduating from least developed country (LDC) status. But here's where it gets controversial: could this agreement inadvertently expose domestic industries to unfair competition and erode hard-won economic gains?
On the surface, the EPA appears to be a win for Bangladesh’s garment sector, ensuring continued duty-free access to Japan’s massive market even after LDC graduation—a relief for exporters who have long feared losing this privilege. The agreement also includes a trade facilitation chapter, promising a more efficient business environment, and robust anti-corruption measures. For instance, traders found misdeclaring imported goods could face fines equivalent to the government’s lost revenue, a move experts believe could curb arbitrary harassment of businesses. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) hailed the EPA as a historic milestone, highlighting its favorable rules of origin that allow garments to enter Japan tariff-free post-graduation.
But this is the part most people miss: while Bangladesh secures access for its garments, it has granted Japan duty-free entry for a staggering array of products, including fabrics, motor parts, chemicals, and pharmaceuticals. Is this a fair trade-off, or are domestic industries being sacrificed for short-term gains? Take the plastics industry, for example. Despite Bangladesh’s self-sufficiency and export potential in this sector, Japanese plastic products will now flood the local market duty-free. Similarly, duty-free imports of Japanese light engineering goods could undercut domestic producers, who lack the scale and technology to compete. Even the fast-growing jewelry sector, with its promising export potential, has been opened up to Japanese competition.
The agreement also commits Bangladesh to phasing out tariffs on Japanese car imports over 12 years, a move that could shrink government revenue and threaten local industries. Meanwhile, Japan has not reciprocated with duty-free access for Bangladeshi leather products, the country’s second-largest export. Should Bangladesh have negotiated harder to protect its key sectors?
Another contentious issue lies in the intellectual property (IP) chapter. By agreeing to international protocols like the Patent Cooperation Treaty (PCT), Bangladesh risks losing the flexibility it enjoys as an LDC. Strict IP enforcement could stifle the production of imitation goods, a sector that employs thousands and provides affordable products to consumers. Is this a necessary step toward modernization, or a blow to small and medium enterprises? As Mohammad Hafizur Rahman, a former WTO Cell director, warns, once IP concessions are granted to one country, they must be extended to all, amplifying the agreement’s impact across sectors.
The EPA also restricts subsidies in critical areas like logistics and transportation, potentially handing Japanese firms an unfair advantage. And with e-commerce rules favoring Japan and cross-border data transfer conditions that Bangladesh is ill-equipped to handle, the playing field seems far from level. Are these concessions setting Bangladesh up for long-term dependency rather than growth?
Business leaders like Syed Ershad Ahmed of the American Chamber of Commerce stress the urgent need for capacity building, logistics reforms, and export diversification. Regulatory bottlenecks, customs inefficiencies, and a lack of investment in research and innovation are holding Bangladesh back. Without addressing these foundational issues, can agreements like the EPA truly deliver on their promises?
As the dust settles on this landmark deal, one question lingers: Is Bangladesh ready to navigate the complexities of this partnership, or will it find itself outmaneuvered by a stronger, more advanced economy? We’d love to hear your thoughts—do you see this agreement as a step forward or a potential misstep? Share your views in the comments below!
