Third round of CEPA talks with S Korea begins today

Bangladesh is hopeful of signing a Comprehensive Economic Partnership Agreement (CEPA) with South Korea within the year as the two sides are set to hold the third round of negotiations in Seoul today.

A delegation of the commerce ministry has left the country to join the negotiation with the South Korean side. Both Bangladesh and South Korea have been engaging in negotiations in 13 areas for signing the CEPA.

The agreement will cover not only tariff issues but also commodity market access, services, rules of origin, economic cooperation and investment.

The economic relationship between the two countries has grown considerably in recent years. Bilateral trade now exceeds $3 billion annually, with Bangladesh’s exports to South Korea topping $2 billion, dominated by readymade garments alongside home textiles, leather goods, frozen food, ceramics, pharmaceuticals, jute products, and more.

Besides, South Korean investment in Bangladesh stands at over $2 billion, concentrated largely in the textile and clothing sector. South Korea also holds the distinction of establishing Bangladesh’s first exclusive foreign Export Processing Zone. The East Asian nation is also one of the top sources of Foreign Direct Investment (FDI), especially in the textile and clothing sector.

The major import items of Bangladesh from South Korea include iron and steel, plastics, and articles thereof, machinery, mechanical appliances, boilers, paper and paperboard, articles of paper, tanning or dyeing extracts, tannins and their derivatives, and more.

As an Economic Partnership Agreement (EPA) with Japan has already been signed, Bangladesh has a good example of signing a deal with a major trading partner, Commerce Secretary Mahbubur Rahman said.

Therefore, it would not be difficult to sign the CEPA with South Korea as the country has already expressed eagerness in the matter, he added.

Once Bangladesh is graduated to a developing nation from the group of least developed countries (LDCs), the country will have to face duty because of losing the preferential market access. Therefore, it is in Bangladesh’s best interest to sign trade deals with major trading partners as a measure to retain the duty-free market access in the post-LDC era, he said.

The UN Conference on Trade and Development (UNCTAD) in a recent report said Bangladesh could lose more than $17.5 billion in exports following its LDC graduation.

As an LDC, Bangladesh has been enjoying duty-free-quota-free (DFQF) access to the South Korean market of about 95 percent (4000+) products under the Asia-Pacific Trade Agreement (APTA) and WTO arrangements since 2008.