FTA with Japan: Feasibility study discussion starts on Monday

The Bangladesh-Japan joint feasibility study group is having a deep understanding about signing a free trade agreement (FTA) or an economic partnership agreement as soon as they work out some paperwork, officials said.

An online discussion to this end will be launched on Monday between Commerce Minister Tipu Mushi and Japanese chief cabinet secretary Hirokazu Matsuno. The discussion will be launched for the Bangladesh-Japan joint study group from Bangladesh’s commerce ministry auditorium.

An official of the Commerce ministry’s FTA wing said Bangladesh -Japan joint feasibility study will start from Monday as per Japanese authority’s correspondence made three days ago. The Japanese cabinet secretary and commerce minister of Bangladesh will announce the start of the joint feasibility study work from their respective countries, the official also said.

He said in this study, the countries will focus on the maximum benefits from trade and commerce between these countries through signing the FTA.

An earlier study found that the firms on both sides want an FTA or EPA, and 85% of the Japanese companies want to sign a FTA, so that Bangladesh continues to enjoy duty benefits after graduating to a developing country in 2026. It will take three to four years to conclude the signing of the FTA or EPA, if the   negotiation will start from this month.

The process of finalising a Comprehensive Economic Partnership Agreement is expected to begin during Prime Minister Sheikh Hasina’s three-day visit to Tokyo. This is a part of a broader process towards a free trade agreement, officials said.

Currently, 338 Japanese companies are running business in Bangladesh through Jetro.

Earlier this year, the Government of Bangladesh signed a $2.67 billion loan agreement with Japan to implement mass infrastructure development projects.

Japan is Bangladesh’s single largest bilateral donor and under Tokyo’s Official Development Assistance programme, Dhaka has received $27.43 billion in grants and loans since 1972.

Bangladesh is already a part of Japan’s ‘Bay of Bengal Industrial Growth Belt’ initiative, which forms the basis of projects such as the MRT line in Dhaka, the deep-sea port at Matarbari and terminal three of Hazrat Shahjalal International Airport, respectively. While the ‘BIG-B’ initiative primarily focuses on economy, infrastructure and development, it also allows Japan to expand its strategic influence in South Asia.

On October 11, the outgoing Japan’s ambassador to Bangladesh Ito Naoki had said bilateral trade between Japan and Bangladesh would reach $20 billion by 2030 from the current $3 billion figure as readymade garment (RMG) shipments to the former were rising fast. Garment exports from Bangladesh to Japan totaled $1.10 billion in the last fiscal year and it is expected that shipments would go up 10-fold to reach $10 billion by 2030.