Bangladesh has taken a historic step in its trade diplomacy by signing its first-ever Economic Partnership Agreement (EPA) with Japan, a move expected to significantly boost exports, attract foreign direct investment, and deepen bilateral economic cooperation between the two countries.
The agreement was signed in Tokyo on Friday by Bangladesh’s Commerce Adviser Sheikh Bashiruddin and Japan’s State Minister for Foreign Affairs Hori Iwao, just five days ahead of Bangladesh’s national election. Senior officials from both sides attended the signing ceremony, including Commerce Secretary Mahbubur Rahman, Bangladesh Ambassador to Japan Md Daud Ali, and Japanese Ambassador to Bangladesh Saida Shinichi, according to a press release issued by the Information Department. Under the EPA, 7,379 Bangladeshi products - including ready-made garments (RMG) - will enjoy 100 percent duty-free access to the Japanese market, marking a major breakthrough for Bangladesh’s export sector. “This EPA is not merely a trade document; it is a strategic economic milestone that reflects deep mutual trust and long-standing friendship between Bangladesh and Japan,” Sheikh Bashiruddin said at the ceremony.
A Strategic Leap for Trade and Exports: Trade analysts believe the agreement could be a game-changer for Bangladesh’s export diversification efforts, particularly at a time when the country is preparing for graduation from Least Developed Country (LDC) status.
According to The Daily Industry, economists note that Japan’s market - known for its high standards and purchasing power - offers Bangladesh a stable, long-term destination for value-added exports.
“Securing full duty-free access to Japan ahead of LDC graduation gives Bangladesh a competitive cushion that many peer economies lack,” said a senior trade economist, quoted by The Daily Industry. In return, Bangladesh has agreed to gradually provide duty-free or preferential access to 1,039 Japanese products, strengthening two-way trade flows.
Major Boost for RMG and Services Sector: A key highlight of the EPA is the inclusion of the ‘single-stage transformation’ rule of origin for garments. This provision allows Bangladeshi apparel exporters to use imported raw materials without complex conditions, significantly easing compliance and reducing costs. “For garment exporters, this removes one of the biggest non-tariff barriers and makes Bangladesh far more competitive in the Japanese apparel market,” an RMG industry leader told The Daily Industry.
Beyond goods, the agreement opens doors in the services sector, enabling Bangladeshi professionals to work in Japan across 120 service categories under 16 sectors, including IT, engineering, education, caregiving, and nursing. This is expected to create new overseas employment opportunities and increase remittance inflows. Bangladesh has also committed to opening 98 sub-sectors across 12 service categories for Japanese service providers.
Investment, Technology, and Industrial Growth: The EPA is widely expected to accelerate Japanese foreign direct investment (FDI) in Bangladesh, particularly in manufacturing, infrastructure, energy, logistics, and high-tech industries. The Daily Industry notes that Japanese firms, known for advanced technology and quality standards, could play a crucial role in upgrading Bangladesh’s industrial base.
“Japanese investment brings not just capital, but productivity, discipline, and technological sophistication - all of which are essential for Bangladesh’s next phase of industrial growth,” a policy analyst said. The agreement is also seen as supportive of small and medium enterprises (SMEs) by integrating them into regional and global value chains.
Long Road to the Agreement: The Bangladesh-Japan EPA is the outcome of seven rounds of negotiations held alternately in Dhaka and Tokyo. The initiative began during the tenure of the previous Awami League government, with a joint study group formed to assess feasibility.
The group’s report, published on December 27, 2023, identified 17 priority sectors and recommended comprehensive negotiations. Formal talks were announced on March 12, 2024, with the first round held in Dhaka in May that year.
Negotiations stalled temporarily following political changes in August 2024, but the current interim government revived the process in November, setting an ambitious one-year timeline to conclude the deal. “Reviving and concluding the EPA within such a short time signals policy continuity and commitment, which international investors closely watch,” The Daily Industry quoted a former trade negotiator as saying. The final round of talks concluded in Tokyo in September, and the Commerce Ministry officially announced the signing on December 22.
A New Chapter in Bangladesh’s Trade Policy: Apart from a Preferential Trade Agreement (PTA) with Bhutan, Bangladesh previously had no bilateral economic or trade agreements. The Japan EPA therefore marks the beginning of a broader shift toward structured trade partnerships. Trade experts suggest the agreement could serve as a template for future EPAs and FTAs with other major economies.
“This deal sets a precedent - it shows Bangladesh is ready to engage in high-standard trade agreements aligned with global best practices,” The Daily Industry observed in its analysis. As Bangladesh looks to strengthen its global economic position, the Japan EPA is being viewed not only as a trade agreement, but as a strategic investment in long-term competitiveness, employment, and inclusive growth.
