Cepa signed with South Korea - could it reshape Bangladesh's industrial future?
Upon implementation, 8,428 Bangladeshi products will gain immediate duty-free market access to South Korea.
Bangladesh and South Korea today (4 August) signed a comprehensive economic partnership agreement (Cepa), under which 97% of Bangladeshi products will receive preferential tariff treatment in the South Korean market, while 87% of South Korean products exported to Bangladesh will enjoy similar benefits.
Speaking at a press briefing after the conclusion of the Cepa negotiations, Commerce Minister Khandakar Abdul Muktadir described the deal as a major milestone in Bangladesh's trade diplomacy.
It is Bangladesh's first comprehensive free trade deal under the current government, he added.
"We concluded a trade agreement with one of the world's largest economies in a very short time. This is our first comprehensive free trade agreement within five months of taking office," he said.
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Upon implementation, 8,428 Bangladeshi products will gain immediate duty-free market access to South Korea.
Under the agreement, Bangladeshi exports, including readymade garments, leather and jute products, will receive preferential tariff treatment in South Korea.
Meanwhile, 87% of South Korean exports, including agricultural products, plastics and spare parts, will enjoy similar access to Bangladesh.
The minister said South Korea, with a nearly $2 trillion economy, will become a major trade partner for Bangladesh.
"We want Bangladesh to become a $1 trillion economy by 2034. To achieve that, we need 8% economic growth, which requires more foreign investment. Agreements like this will help attract it," Muktadir said.
South Korean Trade Minister Yeo Han-koo said the two countries have built economic ties over five decades, starting with the textile sector.
He stressed the need to diversify trade beyond traditional products.
Yeo expressed hope that Bangladesh's new government would further strengthen the economy and said South Korea is keen to expand cooperation in technology, supply chains and investment.
Bangladesh's Ministry of Commerce said bilateral trade has grown steadily in recent years, though it remains relatively modest.
According to the ministry, bilateral trade stands at about $1.39 billion, with Bangladesh exporting $491.73 million worth of goods and importing $902.9 million from South Korea, leaving a trade deficit of around $411 million.
Beyond goods trade, both countries agreed to grant significant market access in the service sector.
Bangladesh will open 95 sub-sectors to South Korea, while South Korea will grant access to Bangladesh across 111 sub-sectors under four modes of service delivery, enhancing technology transfer and skilled workforce participation.
Preparations began with finalizing the Terms of Reference, followed by the formation of 11 Technical Working Groups under a Trade Negotiating Committee.
The first round of negotiations took place in Seoul from 22 to 27 August 2025. Over the year, negotiators held five formal rounds of talks - two in Bangladesh and three in South Korea -alongside around 40 online meetings between chief negotiators.
Bangladesh currently exports readymade garments, home textiles, leather goods, footwear, pharmaceuticals, jute products, frozen foods, and ceramics to South Korea.
In return, it imports industrial machinery, iron and steel, electrical equipment, plastics, chemicals, and paper products.
Beyond expanding trade, CEPA is expected to spur industrialisation, foreign investment, and job creation, serving as a strategic milestone to maintain Bangladesh's global trade competitiveness ahead of its graduation from Least Developed Country (LDC) status.
