As Bangladesh prepares to graduate from the list of Least Developed Countries (LDC) on November 24, 2026, the government is pushing to deepen regional and global trade partnerships to safeguard its economy against the inevitable challenges of this transition. Policymakers, trade experts, and business leaders agree that the country’s export sector-particularly ready-made garments and pharmaceuticals-faces steep hurdles once duty-free privileges and intellectual property exemptions for LDCs expire.
The Ministry of Commerce has therefore intensified efforts to sign new Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs) with major trading partners, aiming to open fresh export markets and retain competitiveness in a post-LDC global environment.
Export Sector Faces Potential $5.37 Billion Loss: According to a recent report by the World Trade Organization (WTO), Bangladesh’s exports could decline by as much as $5.37 billion annually-equivalent to over Tk 45,000 crore-due to the withdrawal of preferential tariff benefits. Once Bangladesh graduates from LDC status, its exports will no longer enjoy zero-duty or low-duty access to markets such as the European Union, Canada, and Japan.
Economists warn that this will pose a significant threat to the country’s economic momentum. “The loss of tariff advantages will affect garment exports most severely, but other key sectors such as leather, ceramics, and frozen foods will also be hit,” said a senior official of the Bangladesh Trade and Tariff Commission.
Pharmaceutical Industry Faces Intellectual Property Challenges: Among the most vulnerable sectors is the pharmaceutical industry, which has thrived under LDC exemptions from the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Currently, Bangladeshi drug manufacturers are not required to pay patent fees to original innovators, allowing them to produce affordable generic medicines for domestic and export markets.
After graduation, however, intellectual property protections will tighten. Local companies will be required to pay licensing or patent fees, which could raise medicine prices and erode competitiveness. “Once the patent waiver ends, medicine prices may rise significantly,” said an industry insider. “This could limit access to affordable drugs not only for Bangladeshis but for millions in developing countries who rely on our exports.”
Reduced Access to Concessional Loans and Subsidies: Graduation will also curtail Bangladesh’s access to concessional loans and aid from international agencies such as the World Bank and Asian Development Bank (ADB). While Bangladesh has already begun borrowing under harder terms, LDC graduation will formally end most low-interest facilities.
Moreover, government subsidies-particularly for agriculture, industry, and remittances-will face stricter scrutiny under WTO rules. This could make it harder for the government to offer direct cash incentives or tax holidays to exporters.
Government Accelerates Regional Trade Integration: In response, the interim government has prioritized regional and bilateral trade partnerships as a strategic countermeasure. The Ministry of Commerce’s Free Trade Agreement (FTA) Division is fast-tracking negotiations with several countries, signaling a proactive approach to securing long-term trade access.
According to ministry sources, Bangladesh is in advanced discussions with Japan, Singapore, South Korea, Malaysia, and the United Arab Emirates (UAE), alongside ongoing dialogue with the European Union, Mauritius, Nigeria, Turkey, Nepal, and Bhutan. These agreements aim to secure reciprocal market access, reduce tariffs, and enhance cooperation in trade, investment, and services. “The goal is to create a strong network of trade partnerships before 2026,” a senior commerce ministry official told Daily Industry. “Bangladesh must be ready to compete on equal terms once LDC privileges end.”
Formation of a National ‘Trade Expert Pool’: Under the Regional Trade Agreement Policy 2022, the Ministry of Commerce is forming a ‘Trade Expert Pool’-a specialized body of economists, negotiators, and legal advisors-to guide FTA negotiations. A concept paper has already been drafted and circulated among relevant ministries for feedback. Officials believe that such a body will help Bangladesh negotiate better terms and avoid pitfalls that many developing countries face in trade agreements.
Digitizing Export Documentation for Efficiency: To improve export transparency and reduce bureaucratic delays, the ministry is also introducing electronic certificates of origin (e-CoO) for exporters. Once implemented, this digital system will make export documentation faster, more secure, and compliant with international trade standards-an important step toward ensuring seamless regional trade under future FTAs.
Progress in FTA and EPA Negotiations: Significant progress has been reported across several ongoing trade talks: Bangladesh-Japan Economic Partnership Agreement (EPA): The first phase of formal discussions has been completed, including detailed talks on trade in services. Both countries will now prepare a draft commitment schedule for final review. Officials confirmed that the next stage will involve ministry-level consultations to finalize the report.
Bangladesh-Singapore Free Trade Agreement (FTA): The second round of negotiations has concluded. Bangladeshi negotiators emphasized that the next phase must highlight the country’s strategic and economic strengths. A comprehensive policy paper is being drafted to identify potential benefits and challenges before the third round.
Bangladesh-South Korea Economic Partnership Agreement: The first round of talks has been held, and preparations for the second are underway. Officials are optimistic that the deal will boost industrial collaboration, investment, and trade in electronics and manufacturing.
Bangladesh-Malaysia Free Trade Agreement: A draft Terms of Reference (ToR) has been sent to the Malaysian government, with both sides preparing for the first formal negotiation round to be hosted in Dhaka.
Bangladesh-UAE Comprehensive Economic Partnership Agreement (CEPA): The Commerce Ministry has completed a progress review and directed officials to begin preparations for the first round of discussions soon.
Meanwhile, a feasibility study on a Bangladesh-EU FTA has already been completed under the supervision of the Bangladesh Trade and Tariff Commission, which will serve as the foundation for formal negotiations with Brussels.
Business Leaders Call for Urgent Policy Alignment: Trade experts and business chambers have urged the government to expedite these trade agreements to ensure continuity in export growth after 2026. “We cannot afford a gap between losing LDC privileges and gaining new trade access,” said a Dhaka Chamber of Commerce official. “Timely FTAs are crucial to protect industries and employment.”
Economists have also advised that the government align its domestic industrial and tariff policies with the new trade realities. “Bangladesh must adopt a comprehensive transition strategy combining trade diplomacy, fiscal reform, and export diversification,” said Dr. Shafiqul Alam, a senior trade analyst.
Outlook: Balancing Challenges with Opportunities: As the 2026 deadline approaches, Bangladesh stands at a pivotal economic crossroads. The loss of LDC advantages will undoubtedly tighten external market conditions and domestic fiscal flexibility. Yet, policymakers see this as an opportunity to modernize trade relations, diversify exports, and strengthen competitiveness. Through strategic regional partnerships and proactive FTA diplomacy, Bangladesh hopes not only to cushion the shock of LDC graduation but also to establish itself as a resilient, globally connected, middle-income economy by the end of the decade.
