The interim government has strongly started processing to access the Regional Comprehensive Economic Partnership (RCEP), an emerging economic bloc encompassing the Asia-Pacific region that represents one third of global GDP.
The immediate-past ousted government halted the move to join the world's largest trade regime due to the last general election.
But, the commerce ministry sent a summary of the RCEP deal and dos to the then prime minister for approval.
In August 2023, an inter-ministerial meeting under the then government recommended joining the trade bloc, as an assessment suggested that joining would increase Bangladesh's exports to the global market by more than 17.37 per cent.
When contacted, commerce secretary Md Selim Uddin said, "We've already started working on RCEP. As per an action plan, we'll go forward on inking an agreement with the RCEP."
An unconfirmed source said the commerce ministry has sent a summery to the Chief Adviser for required approval for starting formal processing with the bloc. But, an unconfirmed source said a summery note has already been prepared which will send shortly.
As soon as the approval comes, formal proceedings will kick-start at the forum headquarters for the country's membership in RCEP, a senior commerce official said.
"We expect to send formal proposal to the RCEP for joining the bloc after approval from the CA."
Bangladesh has started the process of joining mega trade bloc with a hope of a boost in export to the member countries, but it was postponed from October 2023, he added.
It expects to send a formal proposal to the depository and temporary secretariat of the world's largest trade bloc at the ASEAN headquarters for the country's membership.
Bangladesh decided in principle to join the emerging vast trade bloc at the workshop held at the commerce ministry on 01 August 2023.
The ministry has already completed necessary scrutiny and review in this regard, based on commitments fulfilled by Vietnam, a member of the China-mooted bloc.
A high official also said that the commerce ministry will have to take cabinet approval to move ahead. Vetting from the law ministry may also be required.
A study conducted earlier by Bangladesh Trade and Tariff Commission (BTTC) showed Bangladesh's trade with the RCEP member countries mostly concentrated on trade in goods.
Bangladesh's export may grow more than 17 per cent and gross domestic product (GDP) 0.26 per cent if free-trade agreement is signed with the bloc members, it mentioned.
The RCEP deal came into force in January 2022 and any country/customs territory is eligible for applying for membership.
As of now, 15 Asia-Pacific nations are party to the world's biggest free-trade agreement.
The ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, while its FTA partners are Australia, China, Japan, New Zealand and Korea.
An outstanding feature of the RCEP is that it represents the world's largest FTA, comprising about 30 per cent of global GDP and about one third of the world population.
The economic cooperation forum, spanning Asia-Pacific realm that covers 2.3 billion people, accounts for $ 25.8 trillion or about 30 per cent of global GDP.
Also, it accounts for $12.7 trillion or over a quarter of global trade in goods and services, and 31 per cent of global foreign direct investment (FDI) inflows.
In the fiscal year (FY) 2020-21, Bangladesh exported goods worth $3.9 billion to and imported goods worth $24.5 billion from these countries.
On the other hand, the services export was worth $1.8 billion and import worth $2.6 billion.
Bangladesh enjoys preferential market access to many of the RCEP member countries, either through preferential trade agreement (PTA) or through GSP facilities.
After graduating from the least-developed country (LDC) status in 2026, the duty-free access will no longer be available except for reciprocal general preference under the Asia-Pacific Trade Agreement (APTA).
In such a situation, sustaining the consistent progress achieved by Bangladesh in bilateral export trade with some of the RCEP countries as well as availing the opportunity to some potential destinations in RCEP will be a real challenge.
The study says RCEP includes some of the major export destinations as well as major import sources of Bangladesh.
"Considering the bilateral-trade scenario, RCEP remains more as an important partner from the Bangladesh perspective."
Import from RCEP contributes around 43.92 per cent of the total global imports by Bangladesh, 55.33 per cent of the total tax-revenue and 58.56 per cent of total revenue from customs duty collected under home consumption, as of FY 2020-21.
Thus, the probable accession of Bangladesh to RCEP may, however, have a negative impact on revenue generation from customs duty.
Since some major import sources of Bangladesh like China, Japan, Thailand, South Korea, Indonesia, Malaysia and Australia are involved with RCEP, there is a threat of losing a certain amount of revenue from these countries.
More than 68 per cent of total merchandise exports to RCEP are under apparel-product category. Top twenty export items to RCEP mostly consist of apparel products and these products constitute 64 per cent of total exportable.
The study found that the average most-favoured nation (MFN) tariffs for Bangladesh had been comparatively higher than that of the RCEP members.
It says the probable increase in import along with a comparatively protective regime of Bangladesh estimated a probable high revenue loss for Bangladesh compared to that of the RCEP.
"However, as estimated trade creation would likely be higher than the trade-diversion effect for Bangladesh, it may generate additional revenue from other duties and charges, if not reduced due to a possible accession in RCEP," the study mentions as regards a tradeoff.
The BTTC recommends that the government may express its positive stand regarding the accession of Bangladesh to RCEP through weighing all the pros and cons. In that case, domestic rules and regulations may need to be changed in some cases, if a situation arises.
The RCEP negotiations were formally launched during the 2012 ASEAN Summit in Cambodia. India withdrew from the agreement in November 2019 despite participation from the beginning of negotiations.
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