Bangladesh and Japan’s Economic Partnership Agreement (EPA), signed yesterday (6 February), is a wide-ranging deal that goes beyond tariff reductions to cover trade procedures, investment protection, labour mobility and digital cooperation.
The agreement introduces new commitments aimed at simplifying business operations, strengthening legal certainty for investors and expanding cooperation in emerging sectors.
Trade facilitation and anti-corruption measures
The EPA contains a trade facilitation chapter that requires Bangladesh to simplify business procedures and improve the overall trade environment.
It introduces the Authorised Economic Operator (AEO) system, under which approved importers can assess and pay customs duties themselves, allowing goods to clear more quickly.
According to officials involved in negotiations, 10 firms have already been certified as AEOs, while applications from about 70 others are pending.
The agreement also includes a dedicated chapter on corruption and unlawful financial transactions, outlining enforcement mechanisms not previously included in Bangladesh’s bilateral trade agreements.
Another provision revises customs penalty rules, limiting fines to the actual revenue loss rather than allowing blanket penalties of up to 200%, which is expected to reduce complications for businesses.
Legal certainty and investor protection
The investment chapter establishes a structured dispute resolution mechanism.
Parties must first attempt to resolve disagreements through internal consultations within 60 days before seeking arbitration at the International Centre for Settlement of Investment Disputes (ICSID).
The agreement also requires imports to be valued at the actual transaction price, leaving no scope for minimum import prices or tariff values.
In addition, the EPA introduces mutual participation in government procurement, enabling Japanese companies to take part in Bangladeshi tenders and Bangladeshi firms to compete for contracts in Japan, with certain concessions for local companies.
Officials believe these provisions could strengthen investor confidence and encourage further Japanese investment.
Skilled labour mobility
Unlike traditional labour agreements, the EPA focuses on skilled and semi-skilled professionals, including engineers, IT specialists and culinary workers.
Analysts say the inclusion reflects Japan’s demographic pressures and Bangladesh’s interest in expanding higher-value overseas employment.
However, strict language requirements, professional certification standards and employer-led recruitment mean the number of workers is likely to remain limited.
Despite these constraints, the provision is viewed as symbolically important, signalling Bangladesh’s gradual move toward exporting more specialised human capital.
Procurement and digital trade
The agreement also covers government procurement and digital trade, areas that developing countries have traditionally approached cautiously.
Commitments to transparency and clear procedures in public procurement could improve governance and efficiency but may reduce the scope for domestic preference policies.
In digital trade, provisions supporting electronic transactions and cross-border data flows align Bangladesh with emerging global norms.
Experts note that implementing these commitments will require careful balancing of openness with data sovereignty and cybersecurity priorities.
