Free Trade Agreement Policy Bangladesh

Free Trade Agreement Policy in Bangladesh: Promoting Economic Growth

In recent years, Bangladesh has emerged as one of the fastest-growing economies in South Asia. With a population of over 160 million and a strategic location between India and Southeast Asia, the country has enormous potential for economic growth. The government of Bangladesh has recognized the importance of trade liberalization in promoting economic growth and has taken steps to promote free trade agreements (FTAs) with other countries.

What is an FTA?

A free trade agreement is a pact between two or more countries to reduce or eliminate barriers to trade such as tariffs, quotas, and other restrictions. The purpose of an FTA is to increase trade, investment, and economic cooperation between the signatory countries. FTAs create a level playing field for businesses to compete in, resulting in lower prices for consumers and increased trade and investment opportunities for businesses.

Why is an FTA important for Bangladesh?

Bangladesh is one of the least developed countries in the world, with low levels of per capita income and high levels of poverty. The country`s economy is heavily dependent on exports of readymade garments and remittances from overseas workers. As a result, the country is vulnerable to external shocks such as fluctuations in global commodity prices and restrictions on trade.

FTAs can provide a platform for Bangladesh to diversify its export base and reduce its dependence on a few products and markets. By reducing trade barriers, FTAs can increase the competitiveness of Bangladeshi exports, promote investment, and create jobs. FTAs can also help to integrate Bangladesh into regional and global value chains, enabling the country to benefit from the rapid growth in the global economy.

What FTAs has Bangladesh signed?

Bangladesh has signed a number of FTAs with countries in the region and beyond. The most significant FTA is the South Asian Free Trade Area (SAFTA), which was signed in 2006 and came into effect in 2008. SAFTA is a regional trade agreement between the seven countries of South Asia, including Bangladesh, India, Pakistan, Sri Lanka, Nepal, Bhutan, and the Maldives. The purpose of SAFTA is to promote trade and economic integration in the region.

Bangladesh has also signed bilateral FTAs with Sri Lanka, Bhutan, and Nepal. In addition, Bangladesh is negotiating FTAs with a number of countries, including China, India, and Malaysia. These negotiations are aimed at expanding Bangladesh`s export base and increasing foreign investment in the country.

What are the challenges of implementing FTAs in Bangladesh?

Despite the potential benefits of FTAs, there are challenges to their effective implementation in Bangladesh. One of the major challenges is the lack of institutional capacity and expertise in trade negotiations. Bangladesh has limited experience in negotiating FTAs and needs to develop the necessary institutional capacity to undertake these negotiations effectively.

Another challenge is the lack of a coherent national trade policy. Although Bangladesh has signed a number of FTAs, there is no clear strategy for integrating these agreements into a broader national trade policy. This lack of coherence has created confusion among businesses and hindered their ability to take advantage of the benefits of FTAs.


FTAs can play a vital role in promoting economic growth in Bangladesh. By reducing trade barriers, FTAs can increase the competitiveness of Bangladeshi exports, promote investment, and create jobs. However, the effective implementation of FTAs requires institutional capacity, expertise, and a coherent national trade policy. As Bangladesh continues to negotiate and implement more FTAs, it will need to address these challenges in order to fully realize the benefits of trade liberalization.

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