Bangladesh Secures Tariff Preferences for 97% of Goods in South Korea

Bangladesh and South Korea have concluded negotiations on a proposed Comprehensive Economic Partnership Agreement (CEPA), a move expected to deepen bilateral trade, widen market access and create fresh opportunities for investment between the two countries.

Under the proposed agreement, around 97 per cent of Bangladeshi goods will receive preferential tariff treatment in the South Korean market. Key export sectors expected to benefit include ready-made garments, leather and jute products, alongside a range of other Bangladeshi goods. In return, South Korea will receive preferential access for around 87 per cent of its products in the Bangladeshi market.

The agreement was concluded at the Ministry of Commerce on Tuesday, 4 August, following negotiations between the two sides. Commerce Minister Khandaker Abdul Muktadir later briefed the media after the CEPA negotiation conclusion ceremony.

The minister described the development as a significant milestone in Bangladesh’s efforts to expand economic ties with major global economies. He said the government had been able to conclude the country’s first CEPA within five months, highlighting the speed with which the negotiations were completed.

South Korea, one of Asia’s major industrial and technological powers, has developed a long-standing economic relationship with Bangladesh. The new agreement is expected to build on that foundation by encouraging trade in a broader range of products rather than relying heavily on traditional sectors.

For Bangladesh, improved access to the Korean market could be particularly important for export diversification. The country’s ready-made garment industry remains its principal export earner, while leather and jute-based products have considerable potential for expansion in international markets. Preferential tariff treatment could help Bangladeshi exporters compete more effectively by reducing the tariff burden on eligible products.

The agreement could also make imports from South Korea more competitive in Bangladesh. According to the commerce minister, Bangladeshi businesses are expected to benefit from easier access to Korean agricultural products, plastics and spare parts. Such imports could support domestic manufacturing and supply chains, particularly where local industries depend on machinery, intermediate goods or specialised components.

The minister linked the CEPA to Bangladesh’s broader economic ambitions. He said the government aims to take the country’s economy towards a size of US$1 trillion by 2034 and argued that sustained growth and increased foreign investment would be essential to achieving that target. Trade agreements, he added, are being pursued as part of a wider strategy to attract international investors and strengthen economic integration.

South Korean Trade Minister Yeo Han-koo said the two countries had maintained economic relations for decades, with their commercial engagement initially developing around the textile industry. He said changing patterns in global trade meant that both countries now needed to diversify their import and export activities and expand cooperation beyond traditional areas.

Yeo also expressed optimism about Bangladesh’s economic prospects under its new government. He said South Korea was interested in working with Bangladesh in areas including technology and supply chains, signalling potential opportunities for cooperation beyond merchandise trade.

The Korean minister added that the conclusion of the agreement could encourage South Korean companies to consider investing in Bangladesh more favourably. For Bangladesh, this could be particularly valuable as the country seeks to strengthen its industrial base, attract technology-driven investment and improve its position within regional and global supply chains.

The CEPA therefore represents more than a tariff arrangement. Its wider significance lies in the possibility of creating a stronger framework for trade, investment, technology transfer and industrial cooperation. The extent of its eventual impact, however, will depend on the final implementation process, including the detailed terms governing market access and the ability of businesses in both countries to take advantage of the new opportunities.