South Korea deal to boost exports, cut trade gap

A comprehensive economic partnership agreement (CEPA) with South Korea is expected to boost Bangladesh’s exports, reduce the trade gap and strengthen bilateral trade and investment ties, according to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

In a statement yesterday, FBCCI Administrator Md Fazlul Hoque welcomed the signing of the landmark agreement, saying it would provide wider duty-free access for Bangladeshi products and improve the country’s export competitiveness, especially after its graduation from the least developed country category.

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Currently, bilateral trade between Bangladesh and South Korea stands at around $1.39 billion. Bangladesh imports goods worth about $903 million from South Korea, while its exports to the country are around $492 million, resulting in a trade deficit of nearly $411 million.

The FBCCI said the CEPA would allow nearly 97 percent of Bangladeshi products, covering around 8,428 tariff lines, to enter the South Korean market duty-free.

“The agreement will make Bangladeshi products more competitive in the South Korean market and help diversify the country’s exports,” Fazlul said.

He said the ready-made garment (RMG) sector would be the biggest beneficiary of the agreement. Exports of leather and leather goods, footwear, pharmaceuticals, agricultural products and other non-traditional items are also expected to rise.

According to the FBCCI, South Korea imports around $12 billion worth of apparel annually from global suppliers, but Bangladesh currently accounts for only about 3 percent of that market.

The business body said the CEPA would help Bangladeshi exporters secure a larger share of South Korea’s apparel market by improving price competitiveness.

The agreement is also expected to enhance technical cooperation and encourage greater investment and industrial collaboration between the two countries, Fazlul added.