Bangladesh, South Korea Near CEPA Trade Deal With Tariff-Free Export Benefits

Bangladesh and South Korea are in the final stage of negotiations on a Comprehensive Economic Partnership Agreement (CEPA) aimed at expanding bilateral trade, improving market access, and increasing investment between the two countries.

According to Bangladesh's Ministry of Commerce, a Bangladeshi trade delegation is currently in South Korea for the final round of negotiations. A South Korean delegation, led by the country's trade minister, is also expected to visit Dhaka. If discussions conclude as planned, the agreement could be signed on August 4.

The latest progress follows a telephone conversation on Tuesday between Bangladesh Commerce Minister Khandaker Abdul Muqtadir and South Korean Minister of Trade, Industry and Energy Kim Jung-kwan, during which both sides expressed optimism about completing the deal.

The proposed CEPA is expected to provide duty-free access for a wide range of Bangladeshi exports to the South Korean market. Negotiators have already reached agreement on four chapters, while talks continue on eight remaining areas.

Key provisions under discussion include:

• Duty-free market access for Bangladeshi garments, leather goods, pharmaceuticals, jute products, and other exports.
• Continued trade preferences after Bangladesh graduates from the U.N.'s Least Developed Country (LDC) category.
• Rules of origin for selected products.
• Expanded market access in services, including information technology, engineering, finance, and education.
• Increased South Korean investment and technology transfer.
• Simplified customs procedures and faster cargo clearance through digital systems.
• Stronger protections for intellectual property, including patents, trademarks, and copyrights.
• A formal dispute resolution mechanism for implementing the agreement.
• Cooperation in industrial development, infrastructure, and workforce skills.

Trade between the two countries remains modest but has grown steadily in recent years. According to the Ministry of Commerce, bilateral trade totals about $1.39 billion annually.

Bangladesh exports approximately $491.73 million worth of goods to South Korea, while imports from South Korea total about $902.90 million, resulting in a trade deficit of roughly $411 million.

Bangladesh's leading exports to South Korea include ready-made garments, home textiles, leather products, footwear, pharmaceuticals, jute products, frozen foods, and ceramics. Imports from South Korea mainly consist of iron and steel, industrial machinery, electrical equipment, plastics, chemicals, and paper products.