CEPA with South Korea to be signed on Tuesday

Bangladesh and South Korea are set to sign a Comprehensive Economic Partnership Agreement (CEPA) in Dhaka on Tuesday, as the country steps up efforts to secure duty-free market access ahead of its graduation from the least developed country club.

“We are going to sign the trade agreement with Korea in Dhaka on August 4 [Tuesday],” Commerce Minister Khandakar Abdur Muktadir told The Daily Star without further elaboration.

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The agreement is expected to deepen bilateral trade, attract South Korean investment and expand cooperation in services between Dhaka and Seoul.

Officials at the commerce ministry said a Bangladeshi negotiating team is now in Seoul and expects to conclude the final round of talks today (Friday).

“Bangladesh has mainly focused on attracting more South Korean investment under the CEPA,” a senior commerce ministry official said, requesting anonymity.

Most Bangladeshi products, including garments, are expected to receive duty-free access to the South Korean market under the trade in goods chapter, the official said.

Negotiators have already agreed on the Rules of Origin, with only a few issues left to be settled before the agreement is finalised, the official added.

Bangladesh has broadly followed the model of its Economic Partnership Agreement (EPA) with Japan, signed on February 6 this year, to encourage greater South Korean investment. Under that agreement, Japan committed to expanding investment in Bangladesh while granting duty-free access to almost all Bangladeshi goods.

If signed, the CEPA with South Korea will become Bangladesh’s second full-fledged trade agreement, following the EPA with Japan.

Bangladesh has stepped up efforts to secure comprehensive trade agreements as it prepares for life after LDC graduation.

According to the Bangladesh Economic Review 2025, the country currently trades under a mix of bilateral and regional arrangements, including the Preferential Trade Agreement with Bhutan, the South Asian Free Trade Area (SAFTA), the Asia Pacific Trade Agreement (APTA), the Trade Preferential System among OIC Members (TPS-OIC) and the D-8 Preferential Trade Agreement.

The government has shifted its focus towards broader agreements such as EPAs and CEPAs to preserve export competitiveness after LDC graduation. Alongside the Japan EPA and the planned CEPA with South Korea, Bangladesh is pursuing similar arrangements with the United Arab Emirates and Singapore, while also studying potential free trade agreements with several other major trading partners.

In recent years, South Korea has become one of the country’s key trading partners in Asia. Bangladesh imports industrial raw materials from the country, especially for the textile and garment industries, while exports to South Korea, led by garments, have also grown steadily.

In the 2025-26 fiscal year, Bangladesh exported goods worth $421.06 million to South Korea. Exports totalled $462.77 million in 2024-25, according to data from the Export Promotion Bureau (EPB).

Bangladesh imported goods worth $614.5 million from South Korea in the July-December period of the last fiscal year. Imports reached $1.20 billion in 2024-25, up from $902.9 million in 2023-24, according to the Bangladesh Bank.

South Korea is also among Bangladesh’s leading sources of foreign direct investment, particularly in the textile and clothing sector.

After graduating from LDC status, Bangladesh will gradually lose preferential market access in many export destinations, making trade agreements increasingly important for maintaining competitiveness.

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