Japan agrees to carry out jt feasibility study on FTA

Japan has finally agreed to start a joint feasibility study on the signing of a Free Trade Agreement (FTA) or Economic Partnership Agreement (EPA) with Bangladesh to bolster bilateral trade, officials say.
To this end, Dhaka and Tokyo will make a formal announcement today (Monday) simultaneously in a long-expected development for Bangladesh, they add.
Commerce Minister Tipu Munshi would make the announcement in Dhaka while Japan's cabinet secretary make the announcement in Tokyo on the launch of the joint study
Dhaka had long requested Tokyo to conduct a joint feasibility study aimed at striking FTA, so that its products do not lose tariff facility in Japan market when Bangladesh will have graduated to developing-country status in 2026.
This development follows last month's decision to sign a memorandum of understanding (MoU) on trade cooperation between Bangladesh and Japan as Prime Minister Sheikh Hasina was scheduled to fly to Tokyo in late November.
However, her visit was postponed at the last moment due to what government officials in Dhaka said "recent political developments in Japan".
As a least-developed country (LDC) Bangladeshi products enjoy duty-and quota-free market access for almost all goods to the Japanese market. In fiscal year 2021-22 Bangladesh's exports to Japan fetched $1.35 billion compared to $1.18 billion in the previous year.
On the other hand, in FY 2020-2021 Bangladesh's imports from Japan cost $2.02 billion.
Bangladesh Trade and Tariff Commission (BTTC) had earlier studied the pros and cons of signing an FTA deal with Japan and found that Bangladesh would be immensely benefited in the post-LDC era if such an agreement was inked.
Also, the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) last year conducted a survey on 300 companies, local firms, and Japanese companies operating in Bangladesh, and found majority of them expecting the two nations to sign FTA.
Japan's ambassador to Bangladesh, Ito Naoki, in a recent event in Dhaka hoped that bilateral trade could reach $20 billion by 2030 from the present volume of over $3 billion since garment export to the East Asian country is growing fast.
He said most of the companies conducting trade between the two countries want that the two nations sign FTA to retain duty privileges after Bangladesh's graduation from the LDC group.
Country representative of Japan External Trade Organisation (JETRO) Yuji Ando earlier told the FE some Japanese companies felt the need for an FTA or extension of existing generalised system of preference (GSP) facility.
"If the tariff-free access to Japan is not available, relocation (of factories) from Bangladesh might take place to other countries having trade agreements (with Tokyo) like Vietnam, ASEAN, and India," he said in reply to an e-mail.
The JETRO chief also said as Japanese companies in Bangladesh export goods and products mainly to Japan, there is a need to see the balance of trading items between the two countries carefully which would help understand whether the FTA or GSP extension would be better to go to the next level.

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