EU wants Bangladesh to import more to reduce trade gap

European businesses and diplomats have urged Bangladesh to increase imports from the European Union (EU) to help narrow the bloc's large trade deficit with the country.

The call comes as the issue has gained fresh relevance after Bangladesh committed to reducing its trade gap with the United States under the reciprocal tariff deal.

Speaking at a joint dialogue on business climate at the Bangladesh Investment Development Authority (Bida) office in Dhaka on Monday, they also called on Bangladesh to continue strong reforms in key areas, as they want to deepen trade ties with the country.

Officials and business representatives said EU companies were pushing for a more balanced trading relationship as Bangladesh has already promised the US administration that it would buy more American goods, including soybeans, wheat, aircraft, LNG and machinery, in exchange for comparatively lower reciprocal tariffs of 20 percent.

Against this backdrop, EU missions and businesses are seeking similar commitments from Bangladesh, arguing that imports of European machinery, chemicals and other products must rise if the existing imbalance is to be addressed.

As a bloc, the EU is Bangladesh's largest merchandise export destination. Total trade in goods stood at €22.2 billion in 2024, with an EU deficit of €17.5 billion, according to European Commission data.

Garments and textiles accounted for nearly 94 percent of the EU's imports from Bangladesh that year, while the bloc's exports to Bangladesh were led by machinery and appliances (35 percent) and chemical products (23 percent).

In services, total trade amounted to €2 billion in 2023, with the EU holding a surplus of €0.8 billion. Combined goods and services trade reached €23.9 billion in 2023.

At the dialogue, EuroCham Bangladesh Chairperson Nuria Lopez said European businesses and diplomatic missions shared a common goal of expanding foreign direct investment (FDI) flows and addressing the trade deficit as Bangladesh prepares to leave the least developed country (LDC) group next year.

She emphasised the need for reforms across customs, logistics, standards, regulatory enforcement and import procedures, pointing to case studies presented during the meeting.

Representatives of the EU private sector noted that regulatory predictability, transparency and digitalisation are essential if Bangladesh is to attract quality European investment and emerge as a competitive manufacturing hub, according to a EuroCham Bangladesh statement.

Several European envoys echoed these concerns.

Dutch Ambassador Joris van Bommel called for predictable, consistent and transparent regulation alongside a "modern image" of Bangladesh to unlock opportunities in water, agriculture and logistics.

Danish Ambassador Christian Brix Moller highlighted lessons from G2G and Public-Private Partnership (PPP) projects, stressing stronger governance safeguards, quicker resolution of regulatory delays and timely approvals.

Italian Ambassador Antonio Alessandro pointed to growth potential in sectors such as ceramics, leather and design, underscoring the importance of innovation, technology transfer and engaging small and medium enterprises.

Spanish Ambassador Gabriel Sistiaga Ochoa de Chinchetru described the EU as a reliable partner of Bangladesh and called for stability, rule of law, and fair competition to deepen ties.

Swedish Ambassador Nicolas Weeks referenced Sweden's deep links with Bangladesh's garment sector and its push for sustainable fashion, calling for clearer regulations.

French Ambassador Jean-Marc Séré-Charlet highlighted the long-term advantages of partnering with Europe and urged stronger action on good governance and profit repatriation to unlock untapped trade and FDI potential.

German Acting Ambassador Anja Kersten welcomed ongoing reforms but stressed consistent implementation, improved vocational training, an updated agreement for the avoidance of double taxation and efforts to strengthen Bangladesh's global image.

From the government side, Chittagong Port Authority Chairman Rear Admiral SM Moniruzzaman detailed ongoing modernisation initiatives, including digitalisation, the Bay Terminal and the Laldia project to accommodate larger vessels and support 24/7 operations.

Bida Executive Chairman Ashik Chowdhury said structural reforms, better investor grievance resolution and annual "result cards" were being prioritised, adding that Bangladesh aims to bring more European companies to set up local and regional operations.

Lutfey Siddiqi, special envoy on international affairs to the chief adviser, stressed the importance of a clear reform roadmap and early engagement with the EU ahead of Bangladesh's LDC graduation.