Bangladesh Warned On Post-LDC Trade Risks
A new policy study by South Asian Network on Economic Modeling (SANEM) has cautioned that Bangladesh is not institutionally prepared for the trade challenges that will emerge after its graduation from Least Developed Country (LDC) status in 2026.
Authored by Selim Raihan, the report titled Strengthening Trade Competitiveness: Bangladesh’s Strategy for Effective FTAs and EPAs analyses the impact of multiple free trade agreement (FTA) scenarios using the Global Trade Analysis Project (GTAP) model.
The study warns that Bangladesh risks losing key export advantages as preferential access to markets such as the European Union gradually expires by 2029. Under a no-agreement post-LDC scenario, the report projects welfare losses of 2.4 per cent of GDP, a 1.5 per cent decline in GDP and an 8.7 per cent drop in exports, with the textile and apparel sector expected to be among the hardest hit.
The paper identified the recently signed Japan EPA as a relatively stable and beneficial agreement, projecting export growth of 3 per cent and moderate GDP gains. However, it stressed that Bangladesh must modernize customs systems, strengthen rules-of-origin compliance and improve regulatory capabilities to fully utilize such agreements.
While potential FTAs with China and regional blocs such as Regional Comprehensive Economic Partnership could sharply boost garment exports, the report warned these may also weaken broader manufacturing sectors due to rising import competition.
The study called for stronger negotiating capacity, trade defence mechanisms, customs reforms and export diversification to ensure Bangladesh remains competitive in the post-LDC era.
