44 Trade agreements and market access

Chapter 44 of 60 in the Bangladesh 2036 research base. Contents of the series.

The access regime, not the graduation date, sets the decade's export terms, and it is settled file by file rather than in one negotiation

Chapter 02 dated the graduation shock to 24 November 2026 under General Assembly resolution 76/8 [UN CDP 2021], a date now under General Assembly review after the government's 18 February 2026 extension request, the Committee for Development Policy's finding that an extension is appropriate, and ECOSOC's 21 July 2026 referral to the Assembly, with no decision taken as of 6 September 2026 [UN CDP 2026]. This chapter opens the market access architecture those decisions act on, jurisdiction by jurisdiction, because the shock is not one event but nine schemes on nine clocks. The thesis it defends is that Bangladesh is the largest commercial user of LDC trade preferences in the world, with roughly 88 percent of export revenue in 2022-23 earned in nine jurisdictions whose terms of access key on LDC status, the United States by its absence, and that the decade's terms of access will be decided by three files and one coin. The files are the EU GSP+ application, where the regulation's own apparel safeguard is the binding constraint rather than the criteria Bangladesh already passes; the UK's Developing Countries Trading Scheme, where the enhanced preference tier already covers apparel in design and graduation is nearly costless; and the first reciprocal treaty, the Japan EPA or the India CEPA, whose feasibility work is done and whose signatures are not, on the record available to this chapter. The coin is Bangladesh's own tariff wall, a 13.59 percent most favoured nation simple average in 2023 that has not moved from its 14.0 percent 2007 level [WB WITS 2023], because every partner on the list wants concessions Bangladesh has been unwilling to price. The government's own assessment summary puts the do-nothing path at an export loss of 5.5 to 14.3 percent under studies it names [ERD STS 2025], and the chapter 15 scenarios split on whether the files get filed. The FY10 to FY25 record is that the state negotiated constantly and signed almost nothing with a major market; the decade tests whether filing, signing and tariff cutting join that record.

The record: nine jurisdictions, one product, and a regional agreement inventory with no major market in it

The destination map is the access map. Merchandise exports reached 58.8 billion USD in calendar 2024 [BACI 2024], restated from chapter 02. On chapter arithmetic across the same bilateral series, the European Union took 52.4 percent, the figure chapter 02 carries [BACI 2024], the United States 14.8 percent, the United Kingdom 7.1 percent or 4.17 billion USD, India 3.2 percent or 1.86 billion USD, Canada 2.7 percent or 1.57 billion USD, Japan 2.6 percent or 1.52 billion USD, Australia 1.8 percent or 1.04 billion USD, China 2.0 percent or 1.16 billion USD and South Korea 1.2 percent or 0.68 billion USD [BACI 2024]. Nine jurisdictions, 87.6 percent of export earnings on chapter arithmetic, sit close to the government's smooth transition strategy reading of approximately 88 percent of export revenue in 2022-23 for the same nine markets [ERD STS 2025]. Eight of the nine grant Bangladesh LDC specific preferences today; the United States grants none and China's is the newest.

The preference record is the deepest in the LDC group, and it is measurable. The GED impact assessment counted GSP facilities in 38 countries at its FY17 data vintage, found Bangladesh alone accounting for 64.1 percent of all EU imports under Everything But Arms in 2017-18 and 9.5 percent of the EU's total preferential imports, and measured a 9 to 12 percent preference margin on apparel into the EU [GED Plans 2019]. Its FY17 table prices the flows: 20.313 billion USD to the EU row, which then included the United Kingdom, and 0.65 to 1.08 billion USD each to Canada, Japan, China, India and Australia [GED Plans 2019]. In FY17 about 75 percent of total export earnings came from countries granting some preferential access [GED Plans 2019], and the strategy's current read is the same fact: almost three quarters of merchandise exports receive LDC specific tariff preference, with duty free coverage above 90 percent of exports into the EU and Australia and above 80 percent into Canada, South Korea and the United Kingdom [ERD STS 2025]. Chapter 02's negotiating-well verdict rests on this usage record.

The agreement inventory is the other half of the record, and it is thin. The WTO listing for Bangladesh carries four regional trade agreements in force, APTA entered 1976, SAPTA 1995, SAFTA 2006 and the D-8 PTA 2011, all regional and reciprocal in name only for Dhaka's exporters, plus TPS-OIC signed in 2010 but not in force and the BIMSTEC agreement negotiating since 2004 [WTO 2024]. No reciprocal treaty with any major export market is in force. The only bilateral preferential treaty signed is with Bhutan, deepened by the agreement on transit movement signed on 22 March 2023 [MoC 2023]. The negotiation machinery is large: by the FY2022-23 annual report the Ministry of Commerce had completed feasibility studies with 26 countries and put 10 countries and 3 blocs on a priority list under the Regional Trade Agreement Policy 2022 [MoC 2023].

Bangladesh's own wall is the negotiating coin it has declined to spend. The World Bank tariff pull shows a most favoured nation simple average of 13.59 percent in 2023 against 14.00 percent in 2007, chapter arithmetic on the HS4 heading averages, with a standard peak of 25 percent, duty free treatment on only 6.22 percent of 5,387 HS6 lines and the apparel chapters 61 and 62 averaging 24.57 percent [WB WITS 2023]. Sixteen years of graduation growth left the wall standing, and it sits on top of a dense non tariff regime: the UNCTAD pull for 2017 records non tariff measures on all 5,205 tariff products, an average of 7.28 measures per product, technical barriers on 5,204 products and licensing on 857 [UNCTAD TRAINS 2017]. Chapters 40 and 18 explain the wall as revenue and as compensation for bonded warehouse asymmetry; at the trade table it is simply the price every counterparty quotes.

The United States completes the map as the exception that graduation does not change. Bangladesh has never held apparel preferences there and its GSP privileges have been suspended since June 2013 on worker rights grounds [USTR 2013], yet the market takes 14.8 percent of exports under full most favoured nation terms, where the smooth transition strategy notes Bangladesh ranks as the third largest apparel supplier after China and Viet Nam [BACI 2024] [ERD STS 2025]. The 2025 to 2026 tariff sequence chapter 02 dates ends in a successor arrangement that could not be confirmed from the sources this chapter draws on: the Section 122 baseline of 10 percent expired 23 July 2026 under the statutory cap and the Federal Register table is stamped 30 April 2026 [US FR 2026].

Mechanism: preferences built the garment economy, and preference erosion, not graduation, is what the competitors are running on

The preference margin is the parent of the concentration chapter 02 measured. A 9 to 12 percent duty margin on apparel into the EU [GED Plans 2019] is larger than most manufacturing profit margins in open markets, and rational capital chased it into one sector until ready made garments were 86.6 percent of exports in 2024 on the BACI HS61-plus-HS62 basis, 84.6 percent on the BGMEA and Export Promotion Bureau fiscal year series [BACI 2024]. The margin also explains why the sector organised for compliance rather than product upgrade: the binding constraint on earnings was the rule book of the preference, not the customer, which places chapter 02's conventions architecture and chapter 58's safety record downstream of a tariff schedule.

Preference erosion is already running, and it runs on competitors' treaties rather than on Bangladesh's graduation. Viet Nam's FTA with the EU is cutting its apparel tariffs from about 9 percent toward zero on a schedule that lands, by the strategy's reading, at roughly the same time as the EBA end the transition timetable targets at end November 2029, under double transformation origin rules [ERD STS 2025]. Pakistan holds GSP+ today, and Indonesia and India are negotiating FTAs with the EU [ERD STS 2025]. The arithmetic is uncomfortable: even a successful GSP+ file only holds Bangladesh's margin at zero while rivals converge onto it, so the file buys time for diversification, not immunity for garments.

Rules of origin are the second wall, and they tighten with every scheme step down. EBA today admits woven garments on single transformation and knitwear on double transformation [EU GSP 2023], restated from chapter 02. The post-LDC designs raise value addition requirements across the board: 40 percent in the India fallback against 30 under the SAFTA LDC package, 45 percent in the APTA fallbacks against 35 and 40 today, 50 percent for non apparel under UK enhanced preferences against 25, and 60 percent for anything Canada still concedes [ERD STS 2025]. The woven half of the basket, running on imported fabric, fails those tests as drafted, which is why chapter 02's extended cumulation ask is worth more than its tariff ask.

Why then has the treaty shelf stayed empty? Because reciprocal treaties price the import side, and Bangladesh's import side is the partner's export side. In 2024 the RCEP bloc, the largest agreement Bangladesh sits outside, supplied 58.1 percent of its merchandise imports while taking 9.1 percent of its exports; China alone took 2.0 percent of exports against 35.9 percent of imports, India 3.2 against 17.8 [BACI 2024], all shares chapter arithmetic. A tariff cut that opens the 13.59 percent wall to Chinese or Indian goods is a fiscal and industrial decision chapters 40 and 18 must own, which is exactly why 26 completed feasibility studies produced one signed treaty with a market of Bhutan's size [MoC 2023]. The machinery negotiates; the wall does not move.

The decade ahead: three files and a treaty race, on the timetable the schemes themselves set

The EU file is the whole ballgame because the EU is 52.4 percent of exports and clothing is more than 90 percent of that flow [ERD STS 2025]. The sequence the strategy documents: the European Parliament resolution targets 31 December 2027 as the end of the current GSP scheme, with the successor regulation deferred to that date; the draft regime drops the import share condition from the vulnerability criterion, which Bangladesh passes anyway, its seven largest sections exceeding 75 percent of GSP covered imports over three consecutive years; the sustainable development criterion expands to 32 conventions, of which 10 are ILO labour instruments, and Bangladesh has ratified all of them; and Article 29 of the draft keeps a textile and clothing safeguard that denies preferences to any GSP+ beneficiary whose apparel exceeds 6 percent of EU imports of the same products, a threshold Bangladesh passes at close to half of EU GSP covered clothing imports, where the condition for preferences is a share no higher than 37 percent [ERD STS 2025]. As drafted, Bangladesh could qualify for GSP+ and still watch its clothing face the 11.5 percent most favoured nation duty rather than the 9.2 percent standard GSP rate [ERD STS 2025]. The government's asks are the safeguard waiver and origin relief; the application window puts filing around 2028, the working deadline chapter 02 targets; the filing's actual status as of September 2026 could not be confirmed, with the Ministry of Commerce and the European Commission resolving. Every chapter 15 scenario keys on this file.

The UK file is the one already won in design. Comprehensive preferences, duty free for all products, run three years past graduation, to November 2029 on the timetable the strategy targets; Bangladesh then rolls into the enhanced preference tier for economically vulnerable lower middle income countries, which it qualifies for because apparel alone is more than 90 percent of its UK bound exports against a 75 percent concentration test, and that tier covers 92 percent of UK tariff lines with apparel included and no safeguard clause [ERD STS 2025]. The strategy reads more than 95 percent of current UK bound exports keeping duty free access through the transition [ERD STS 2025]. The residual costs are origin, double transformation for clothing and 50 percent value addition for non apparel, and the income exit: three consecutive years as an upper middle income country ends the benefits [ERD STS 2025], a door chapter 01's growth scenarios could open late decade.

The middle tier is where graduation actually bites. Canada's least developed country tariff is duty free today; the strategy records a planned standard transition of three years, after which the general preferential tariff applies with clothing at an average 16.2 percent, footwear near 11 percent and a 60 percent value addition test, with a new GSP in force from 1 January 2025 whose GPT+ tier was not fully specified when the strategy closed [ERD STS 2025]. Japan's LDC scheme covers 98.2 percent of tariff lines duty free; the non-LDC GSP excludes garments in chapters 61 and 62, so apparel duties move from zero to above 8 percent, 9.0 percent on the strategy's table, and footwear from 3.6 to about 19 percent [ERD STS 2025]. South Korea's fallback is APTA: concessions on 2,560 products at a 45 percent value addition requirement, leaving apparel and footwear facing hikes of 10 to 12 percent [ERD STS 2025]. Against each of these, the treaty race is the offset: the Japan EPA joint study group held its first meeting in April 2023 and a memorandum on a roadmap followed that April, with rounds after FY2022-23 not confirmed from the sources this chapter draws on, Ministry of Commerce resolving [MoC 2023].

The neighbourhood file is China and India, and the asymmetry numbers above explain its politics. China granted duty free quota free access on 8,930 products, 98 percent of its tariff lines, from 1 September 2022 [MoC 2023], about 99 percent of lines on the strategy's current reading; the post-LDC fallback is APTA non-LDC treatment, concessions on 2,191 products at a margin of about 33 percent of the most favoured nation rate, leaving apparel near 5 percent and footwear near 7 percent with value addition up to 45 percent, and a bilateral FTA feasibility study running under a signed memorandum [ERD STS 2025] [MoC 2023]. Any Chinese announcement on continued preferential treatment after the strategy's February 2025 vintage could not be confirmed from the sources this chapter draws on, the Ministry of Commerce and China's commerce ministry resolving. India's SAFTA LDC package gives zero tariffs on about 11,513 lines with only 25 excluded, and the separate duty free tariff preference scheme covers about 11,260 products; both lapse for Bangladesh at graduation, the SAFTA sensitive list rises from 25 to 614 lines, value addition rises to 40 percent, and the strategy's estimates put woven garments at a 19.4 percent average tariff, knitwear near 16 percent and jute near 5 percent if no arrangement is reached [ERD STS 2025]. The India CEPA joint feasibility study is complete and the decision to negotiate was taken at prime minister level on 6 September 2022, with rounds after December 2022 not confirmed from the sources this chapter draws on, Ministry of Commerce resolving [MoC 2023]. Australia is the quiet exception: garments face only a 5 percent most favoured nation rate and Australia has informed the government it does not intend to change the regime for graduating LDCs [ERD STS 2025]. RCEP accession is the strategy's bloc level ask [ERD STS 2025]; its application status could not be confirmed from the sources this chapter draws on, Ministry of Commerce resolving.

The WTO transition runs underneath all of it. The pharmaceutical patent waiver targets 1 January 2033 and the general LDC transition targets 1 July 2034, in each case or graduation, whichever comes first, under the 2015 and 2021 decisions [WTO 2015] [WTO 2021], restated from chapter 02 with the industrial leg chapter 19 owns; both waivers therefore end for Bangladesh at graduation unless the LDC group's pending request to the WTO to keep both to their full terms is granted. The 2011 services waiver, the legal basis for preferential treatment of LDC services and service suppliers, matters to the service lines chapter 20 tracks; whether notifiers extend coverage after graduation could not be confirmed from the sources this chapter draws on, WTO notifications resolving [WTO 2011]. The strategy's remaining asks are listing among the net food importing developing countries and continued Annex VII(b) standing under the subsidies agreement [ERD STS 2025].

The projections on record, all summarised with authors in the strategy, bracket the cost of failure: UNCTAD's 2016 modelling projects exports 7.5 percent lower if Bangladesh graduates alone and 5.5 percent lower if all LDCs graduate together; Rahman and Bari's 2018 estimate projects export revenue down 8.7 percent; a 2020 partial equilibrium study projects a 14.28 percent export decline; Razzaque and Rahman project EU export losses of 5 to 19 percent under standard GSP and 6 to 24 percent under full most favoured nation rates; and GED's own matrix and general equilibrium assessment projects a garment export shock cutting output 0.39 to 1.17 percent, employment by 0.41 to 0.88 million workers, raising the poverty rate 0.14 percentage points and depressing labour returns 5.5 percent [ERD STS 2025]. These are the numbers the chapter 15 baseline and stall scenarios translate into growth paths, with the baseline assuming the GSP+ file is filed in 2028 and settled by negotiation, the reform scenario assuming it is granted with extended cumulation, and the stall scenario assuming the window slips toward most favoured nation duties near 12 percent from 2030.

The risks are the safeguard clause and the empty signing table; the upside is that one file is already won and the coin is printable

Risks. First, the GSP+ gap with the safeguard binding: clothing, more than 90 percent of a 52.4 percent destination [ERD STS 2025], facing the 11.5 percent most favoured nation duty from 2030 in the failure scenario chapter 15 prices, a margin shock no buyer contract absorbs silently; the revealing indicators are the revised GSP regulation text and the application filing date. Second, the signing table stays empty: if no Japan EPA or India CEPA signature lands before the EBA end the transition timetable targets at end November 2029, Japan, Korea and Canada duties rise exactly on schedule and the negotiation-only record extends through the decade; the revealing indicator is the negotiation round announcements of the Ministry of Commerce and its counterparties. Third, origin and standards failure after access is won: the 40 to 60 percent value addition tests and the effective implementation of 32 conventions, with 10 ILO labour instruments among them, are audits Bangladesh must pass continuously, and the leather sector's loss of buyers over environmental non-compliance, which the strategy cites, is the precedent; the revealing indicators are the origin certificate rejection record of partner customs administrations and the EPB destination series chapter 02 watches.

Upside. First, the UK design disarms the second cliff already: 92 percent of tariff lines with apparel included and no safeguard [ERD STS 2025] means the market taking 7.1 percent of exports in 2024 [BACI 2024] keeps duty free access through the transition in the design now in force, and the residual work is origin compliance rather than negotiation. Second, the compliance dividend: the same 32 conventions are the labour, environment and governance reforms chapters 12 and 58 pursue for their own sake, so the GSP+ conditionality converts a trade requirement into an institutional upgrade with a dated enforcement clock. Third, the coin is printable: every percentage point cut from the 13.59 percent wall under the tariff rationalisation the strategy ties to the National Tariff Policy [ERD STS 2025] is simultaneously negotiating consideration for the Japan, India and China treaties and a direct cut in the landed cost of the 58.1 percent of imports the RCEP bloc supplies [BACI 2024], which is why the trade file and the revenue file of chapter 40 are one decision seen from two ministries.

What to watch: five indicators whose thresholds mark the regime

1. The EU GSP+ file and its safeguard carve out. Current status: application file prepared, filing not confirmed as of September 2026, not established, Ministry of Commerce and the European Commission resolving. Threshold: filing inside the 2028 working deadline chapter 02 targets with a revised Article 29 that admits apparel holds the zero duty regime; a missed window or an unamended safeguard delivers the 11.5 percent clothing duty of the failure scenario chapter 15 prices.
2. Duty free coverage of merchandise exports. Current value: almost three quarters of exports carrying LDC specific preference, with above 90 percent duty free into the EU [ERD STS 2025]. Threshold: coverage below 60 percent of exports by FY31 in the paths this chapter assumes marks the cliff passing through; holding above 75 percent marks the replacement schemes, GSP+ plus DCTS plus treaties, working.
3. First reciprocal treaty with a major market in force. Current value: none; the inventory is four regional agreements in force (APTA, SAPTA, SAFTA, D-8 PTA), one signed but not in force (TPS-OIC) and BIMSTEC negotiating since 2004, with 10 countries and 3 blocs on the priority list [WTO 2024] [MoC 2023]. Threshold: a Japan EPA or India CEPA signed and in force before the EBA end the transition timetable targets at end November 2029 is the success marker; no signature by FY30 marks the negotiation-only decade repeating.
4. Bangladesh's own most favoured nation average. Current value: 13.59 percent in 2023, unchanged band since 2007 [WB WITS 2023]. Threshold: below 10 percent by FY31 under the rationalisation the National Tariff Policy targets signals treaties being bought; the average stuck above 13 percent predicts the signing table stays empty.
5. The preference jurisdiction share of exports. Current value: approximately 88 percent of export revenue to the nine jurisdictions in 2022-23 [ERD STS 2025]. Threshold: a fall below 80 percent by FY32 in the diversification scenarios marks export growth rotating into non-preference markets; a rise above 90 percent marks deepened dependence on preference continuity and a narrower margin for filing failure.

A note on the set: four of the five print from series already published and the fifth is a document watch; together they answer whether the access regime was transferred or lost.

Sources used

[UN CDP 2021] UN Committee for Development Policy, LDC graduation decision for Bangladesh, triennial review, from chapter 02. [UN CDP 2026] UN LDC Portal, Bangladesh graduation status: 18 February 2026 extension request, CDP conclusion, ECOSOC decision of 21 July 2026; accessed 6 September 2026, from chapter 02. [EU GSP 2023] GSP regulation (EU) No 978/2012 as applied, EBA rules of origin and GSP+ conditions, from chapter 02. [WTO 2015] TRIPS Council decision on pharmaceutical products transition for LDCs, from chapter 02. [WTO 2021] TRIPS Council decision extending the general LDC transition, from chapter 02. [WTO 2011] WTO General Council decision on preferential treatment to services and service suppliers of least developed countries, the LDC services waiver. [WTO 2024] WTO RTA record for Bangladesh via TradeWeave parquet, series: wto_rtas_bd, six agreements with entry years and status: four in force (APTA, SAPTA, SAFTA, D-8 PTA), one signed but not in force (TPS-OIC), one negotiating (BIMSTEC). [BACI 2024] CEPII bilateral trade via TradeWeave parquet, series: bd_hs6_trade for the export total and RMG share, series: bd_bilateral for destination and import partner shares, chapter arithmetic for shares and RCEP aggregates, restated from chapter 02 where marked. [WB WITS 2023] World Bank World Integrated Trade Solution tariff statistics via the trade/bd_tariff_hs4_summary.parquet pull, most favoured nation simple averages and duty free line counts, chapter arithmetic across HS4 headings. [UNCTAD TRAINS 2017] UNCTAD Trade Analysis and Information System non tariff measures for Bangladesh via the trade/bd_ntm.parquet pull, 2017 observation. [USTR 2013] Office of the United States Trade Representative, GSP eligibility determination suspending Bangladesh on worker rights grounds, June 2013. [US FR 2026] Federal Register tariff actions via the trade/bd_us_tariff_actions parquet, record stamped 30 April 2026: Section 122 baseline of 10 percent from 24 February 2026 expiring 23 July 2026, carried from chapter 02. [GED Plans 2019] General Economics Division, Impact Assessment and Coping up Strategies of Graduation from LDC Status for Bangladesh, volumes via ocr_text/govtwin_ecnec, FY17 data vintage, publication year set at 2019 from its March 2019 retrieval dates. [ERD STS 2025] Economic Relations Division, Bangladesh Smooth Transition Strategy for LDC graduation, February 2025, via ocr_text/policies: market access chapter, Tables 2.1 to 2.4, scheme by scheme tariff and origin comparisons, EU GSP+ criteria and Article 29 analysis, impact study summaries with named authors. [MoC 2023] Ministry of Commerce annual report FY2022-23, via ocr_text/moc_bd: FTA wing record, India CEPA feasibility and negotiation decisions, Japan EPA joint study group and memorandum, China FTA feasibility memorandum and duty free quota free access of 1 September 2022, Indonesia and Sri Lanka PTA rounds, Bhutan transit agreement, Regional Trade Agreement Policy 2022.

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Verified line by line against primary sources: 125 claims checked, 5 corrected.

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