Bangladesh Trade Agreements in 2026: SAFTA, APTA, the Japan EPA, the US Deal and LDC Graduation

Bangladesh trade agreements: where they stand in October 2026

Bangladesh trade agreements are being rewritten faster in 2026 than at any time since the country joined the multilateral system. In ten months Dhaka has signed its first comprehensive economic partnership agreement, with Japan; signed a binding Agreement on Reciprocal Trade with the United States that lost its tariff basis eleven days later; asked the United Nations to delay its graduation from least developed country status; and pressed ahead with talks with Korea, the UAE, the European Union and others. For any business that buys from or sells into Bangladesh, the duty it pays now depends on which agreement applies, whether it is actually in force, and whether the goods can prove their origin.

This analysis takes the agreements one by one: how a treaty becomes binding, what SAFTA, APTA, BIMSTEC, the D-8 PTA and the Japan EPA deliver, how GSP, Everything But Arms and GSP+ differ, and what the US reciprocal trade agreement requires. WTO rules and trade remedies are covered in our separate analyses, which we link rather than repeat.

Summary: Bangladesh trades on three layers of rules: WTO commitments, negotiated agreements (SAFTA, APTA, the D-8 PTA, a Bhutan PTA and the signed Japan EPA), and unilateral preferences such as EU Everything But Arms and the UK DCTS. LDC graduation threatens the third layer, which is why the government is racing to expand the second. The US reciprocal trade agreement sits apart: signed, not in force, and overtaken on tariffs by a Section 301 duty.

Key point: An agreement saves duty only when it is in force for both countries, the concession is implemented in the importing country's tariff, and the goods meet its rules of origin with a valid certificate. Signature alone changes nothing at the border, and in October 2026 neither the Japan EPA nor the US deal was in force.

At a glance

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Table of Contents

How Bangladesh trade agreements become law

A trade agreement binds Bangladesh internationally once it is in force, but it changes the duty an importer pays only when the government implements it in domestic law. The gap between signature, entry into force and implementation is where traders lose money.

Article 145A and the executive treaty power

The Constitution does not require Parliament to approve a trade agreement. Article 145A provides that all treaties with foreign countries shall be submitted to the President, who shall cause them to be laid before Parliament, with treaties connected with national security laid in secret session.[1] Negotiation, signature and ratification are executive acts, led by the Ministry of Commerce for trade agreements. The duty to lay treaties before Parliament became a live political issue in 2026, because both the Japan EPA and the US deal were signed by the interim government in the days before the February election.[4] [13]

From treaty text to the customs tariff

Once an agreement is in force, Bangladesh gives effect to its tariff concessions by notification under customs law, setting a concessionary rate for goods that qualify. The importer must then claim the rate on the bill of entry and support it with a certificate of origin in the agreement's form. On the export side, the Export Promotion Bureau issues preferential certificates of origin for Bangladeshi goods, and the importing country's customs decides whether to accept them. Do not quote a preferential price until the agreement and the implementing notification line up.

Agreements versus unilateral preferences

Much of Bangladesh's preferential access abroad does not come from an agreement at all. Everything But Arms and the UK DCTS are granted unilaterally under the importing country's law and can be changed without Bangladesh's consent. LDC graduation removes eligibility for the most generous of them, and only negotiated agreements can replace them on a stable footing.

The map of Bangladesh trade agreements in October 2026

The table sets out every agreement and preference scheme that matters for Bangladeshi trade, with its legal character and its status as at the date of this article. Status is the column that most often surprises clients.

Bangladesh also operates a preferential trade agreement with Bhutan concluded in 2020, under which trade continues to expand on a defined product list.[3]

LDC graduation and Bangladesh trade agreements

LDC graduation is the event that is reshaping every other part of Bangladesh's trade policy. Bangladesh, Nepal and Lao PDR are scheduled to graduate on 24 November 2026. After taking office in February 2026, the BNP government asked the UN Committee for Development Policy to extend the preparatory period to 24 November 2029, citing the need for more time to prepare for international competition.[2] The request was submitted on 18 February 2026.[3]

Where the decision stands

As of 19 October 2026 the General Assembly had not decided. The deferral had been proposed by the G-77, and Commerce Minister Khandakar Abdul Muktadir said he expected a decision within a week and, failing that, within October. In September the UN also set up a Working Group on Smooth Transition for Graduating LDCs, led by the permanent representatives of Angola and Finland.[2] Plan for both dates until a resolution is adopted.

What graduation does to each kind of agreement

Graduation does not terminate any agreement in force. SAFTA, APTA and the D-8 PTA continue, although LDC-specific treatment within them, such as lower origin thresholds and longer liberalisation schedules, is tied to LDC status and will need to be renegotiated or will fall away. The larger impact is on unilateral preferences: EU Everything But Arms and similar schemes are reserved for LDCs and end after their transition periods. WTO special and differential treatment for LDCs also ends, a subject we analyse in detail in our guide to the WTO impact on Bangladesh trade.

Why graduation drives the new agreements

The government's response to LDC graduation is to convert unilateral preferences into negotiated ones. Bangladesh is pursuing free trade agreements or comprehensive economic partnership agreements with ten countries and blocs, has completed 38 feasibility studies and is seeking to join the 19-member Regional Comprehensive Economic Partnership.[3] Each will require Bangladesh to open its own market in return, a change in kind from one-way LDC access.

SAFTA: the South Asian Free Trade Area in practice

The Agreement on SAFTA was signed in Islamabad on 6 January 2004, entered into force on 1 January 2006 and began tariff reductions on 1 July 2006. Its members are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.[5] For trade with India it remains the most commercially significant regional instrument.

Coverage and sensitive lists

SAFTA liberalises tariffs only on products outside each member's sensitive list, and those lists are long. Under the agreement the non-LDC members were to cut tariffs on LDC goods to between zero and five per cent, and India has given LDCs duty-free access for all products outside its sensitive list since 1 January 2008.[5] Before pricing a SAFTA deal, check the eight-digit tariff line against the importing member's current sensitive list, not a summary.

SAFTA rules of origin

The general SAFTA rule of origin combines a change of tariff heading with minimum domestic value addition, set at 30 per cent for LDC exporters and higher for others, with product-specific rules for listed items. Regional cumulation is available where regional value addition reaches 50 per cent and at least 20 per cent is added in the final exporting country.[5] Graduation will expose Bangladeshi exporters to the non-LDC thresholds once LDC treatment ends, so cost sheets should be tested against the higher figure now.

Where SAFTA claims go wrong

SAFTA disputes rarely concern the treaty text. They arise from documents: certificates issued in the wrong form, value-addition calculations that cannot be supported by production records, and invoices issued from outside the region, which can jeopardise a claim even where the goods are of SAARC origin. Port and route restrictions can also close the land border to particular goods at short notice; a tariff preference does not guarantee the route, so contracts should allocate that risk.

APTA: preferences with China, India and Korea

The Asia-Pacific Trade Agreement is the successor to the 1975 Bangkok Agreement, revised and renamed with its framework in force from 1 July 2006. Its participating states include Bangladesh, China, India, the Republic of Korea, Lao PDR and Sri Lanka.[5] APTA links Bangladesh with China and Korea on a negotiated basis, through partial margins of preference on listed products rather than full free trade.

APTA's origin rule requires minimum value addition of 45 per cent of FOB value for developing members and 35 per cent for LDC members.[6] For many Bangladeshi exports to China, APTA is in practice less important than China's own unilateral zero-tariff treatment for LDCs, which has its own origin rule.[6] The two must not be confused on a certificate: a claim under the wrong scheme is a claim under no scheme. After graduation, APTA's negotiated concessions become more valuable precisely because they do not depend on LDC status.

BIMSTEC and D-8: agreements on paper and agreements in force

BIMSTEC: a framework still waiting for a goods deal

The framework agreement on a BIMSTEC free trade area was concluded in February 2004, and a trade-in-goods agreement was scheduled for 2006 but was not completed because members could not agree.[5] At the senior officials' meeting in Bangkok in April 2025, the foreign secretary urged members to finalise six instruments: goods under the framework agreement, rules of origin, mutual assistance in customs matters, dispute settlement, trade facilitation, and investment and trade in services.[8] Until the goods agreement and its origin rules are signed and in force, BIMSTEC offers no tariff preference, and no certificate can be issued under it.

The D-8 PTA: now fully ratified

The Preferential Trade Agreement among the D-8 countries was signed at the Bali summit on 13 May 2006, entered into force on 25 August 2011 and began implementation on 1 July 2016. Egypt ratified on 16 June 2026 and submitted its instrument in October 2026, so all eight original signatories, Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Türkiye, have now ratified. Members are also exploring a broader framework, possibly a comprehensive economic partnership agreement.[7]

The D-8 PTA has been a minor instrument for Bangladeshi exporters because its concessions are limited. Full ratification creates a platform for the CEPA discussions, and exporters to Türkiye, Indonesia, Egypt or Nigeria should check for a D-8 concession on their tariff line before assuming MFN duty.

The Japan EPA: Bangladesh's first comprehensive agreement

The Japan–Bangladesh Economic Partnership Agreement was signed on 6 February 2026 at Japan's Ministry of Foreign Affairs in Tokyo, the first time Bangladesh has signed an EPA with any country.[4] The commerce ministry describes it as Bangladesh's first formal free trade agreement, and in October 2026 it was awaiting ratification.[3] It covers goods, services, investment and economic cooperation, not only tariffs.

Goods: what each side gives

About 7,379 Bangladeshi products, including ready-made garments, will receive duty-free access to Japan, while Bangladesh will give duty-free or preferential access to 1,039 Japanese products, phased in over time. Garments benefit from a single-stage transformation rule, which allows apparel to qualify without complex raw-material conditions.[4] That origin rule is the most valuable feature of the agreement for the garment sector, because Japan's unilateral LDC preference will end on graduation and the EPA locks in flexible origin on a treaty basis.

Services and investment

Japan opens 120 sub-sectors across 16 categories, including IT, engineering, education, caregiving and nursing, to skilled Bangladeshi professionals, and Bangladesh opens 98 sub-sectors across 12 categories to Japanese service providers.[4] A market-access commitment does not itself issue a licence, but once the Japan EPA is in force it constrains refusals on nationality grounds.

What to do before entry into force

No preference can be claimed under the Japan EPA until it enters into force and the tariff schedules are implemented. Exporters should classify products against Japan's schedule, identify which items are duty-free at once and which are staged, and build origin files to the EPA's rules of origin. Japanese suppliers should check whether their product is among the 1,039 lines and price long-term contracts accordingly.

GSP, Everything But Arms and GSP+: preferences that are not agreements

For the garment sector, unilateral preferences matter more than any regional agreement. These schemes are creatures of the importing country's own law, so their rules can change without negotiation.

The EU: from EBA to the new GSP Regulation

Regulation (EU) 2026/1395 replaces the 2012 GSP framework. It was adopted by the European Parliament on 28 April 2026, published in the Official Journal on 22 June and applies from 1 January 2027 for ten years. Bangladesh keeps duty-free, quota-free Everything But Arms access for a three-year transition after LDC graduation, ending around late 2029 on the current timetable unless extended.[9]

The GSP+ hurdle

GSP+ is the only EU tier that would preserve broad duty-free access after EBA, and it is harder to reach. The number of conventions a beneficiary must ratify and implement rises from 27 to 32, with the Paris Agreement among the additions. Preferences are automatically suspended where a country's share of EU GSP imports in a product section exceeds 37 per cent; for apparel the threshold falls from 47.2 per cent to 37 per cent. After EBA, garments in chapters 61 and 62 must also satisfy double transformation, from yarn to fabric to garment, while Bangladesh imports about 60 per cent of its woven fabric.[9] Hence the government's priority is an EU FTA, not GSP+.

The UK: continuity under the DCTS

The UK position is more favourable. Bangladesh currently has tariff-free access for 99.8 per cent of its goods exports under the Developing Countries Trading Scheme. After graduation, existing access remains unchanged for three years, and Bangladesh then moves directly into the Enhanced Preferences tier, where 92 per cent of goods remain eligible for duty-free entry, with no new agreement required. Access for knitwear and woven garments stays the same, and garment exporters keep their current origin rules without double transformation.[10]

Other preference-granting countries

Bangladesh also benefits from LDC preferences granted by Japan, China, India, Korea, Australia and New Zealand, each with its own rules of origin.[6] Each sets its own post-graduation transition; do not assume the EU timetable applies everywhere.

The US–Bangladesh reciprocal trade agreement

The US–Bangladesh reciprocal trade agreement is the most consequential and least understood of the 2026 Bangladesh trade agreements. Its obligations on Bangladesh are heavy, but the US tariff concession it was built around no longer exists in the form agreed.

What was signed

The Agreement on Reciprocal Trade was signed on 9 February 2026 under the interim government, three days before the 12 February election.[13] USTR described it as legally binding: the United States would keep a 19 per cent reciprocal tariff on Bangladeshi goods, with a zero rate for products listed in Annex III of Executive Order 14346, in return for significant preferential access for US industrial and agricultural goods, from machinery and vehicles to dairy, beef and poultry.[11]

The 32-page text uses "Bangladesh shall" 131 times and "US shall" six times.[12]

Bangladesh's obligations

Bangladesh agreed to accept vehicles built to US federal safety and emissions standards; accept FDA certificates and marketing authorisations for medical devices and pharmaceuticals; remove import restrictions on US remanufactured goods; recognise US sanitary and phytosanitary measures; protect common food names used by US producers; and buy US wheat, soy and cotton with an estimated total value of US$3.5 billion. It also committed to prohibit imports of goods made with forced or compulsory labour, amend labour laws on freedom of association and collective bargaining, including in export processing zones, resolve criminal cases against workers for union activity, and introduce a minimum wage review mechanism.[11]

Further commitments reach well beyond tariffs: digitising customs clearance for US goods by 2030, easing foreign ownership limits in oil and gas, insurance and telecoms, revising or repealing the 2021 digital and OTT rules, accepting free cross-border data flows and refraining from requiring source code as a condition of market access.[12] On economic security, Bangladesh agreed to cooperate on export controls, duty evasion and inbound investment screening.[11]

Clauses that constrain other agreements

Three provisions matter for every other negotiation Bangladesh is conducting. If Bangladesh concludes a new trade agreement with a non-market economy that the United States considers undermines the deal, or a new digital trade agreement that it considers harmful, the United States may seek consultations and, failing resolution, terminate and reinstate earlier tariffs. Bangladesh must also not buy nuclear reactors, fuel rods or enriched uranium from countries that could jeopardise essential US interests, subject to exceptions.[12] These clauses bear directly on talks with China and on RCEP accession.

The textile mechanism

The agreement provides for zero or reduced US tariffs on certain garments within quotas linked to Bangladesh's imports of US cotton and other textile inputs.[12] In October 2026 the commerce ministry reported that the zero-tariff treatment for those textile quotas was inactive.[3] USTR is separately evaluating a three-year tariff-rate quota that would waive the Section 301 duty on specified garments made with American cotton and textile inputs; that proposal was still under evaluation, not in effect.[14]

How the US courts and Section 301 changed the deal

On 20 February 2026 the US Supreme Court held that the emergency-powers statute on which the reciprocal tariffs rested did not authorise them.[13] A temporary 10 per cent tariff under Section 122 of the Trade Act of 1974 followed; the Court of International Trade ruled it unlawful on 7 May, and its statutory clock expired on 24 July.[13] From 12:01 a.m. Washington time on 24 July 2026 a 10 per cent Section 301 duty replaced it, following a USTR forced-labour investigation which concluded that Bangladesh and others had not effectively banned imports of forced-labour goods.[14]

The Section 301 duty covers about 99.4 per cent of Bangladesh's exports to the United States and excludes items such as fuel oil, gas, fertiliser, selected agricultural products and goods already subject to Section 232 tariffs. Bangladesh is among 17 of 86 trading partners in the 10 per cent tier, while China, Vietnam and Thailand face 12.5 per cent.[14] Average US tariffs on Bangladeshi garments stand at about 25.62 per cent.[3]

Legal status in October 2026

The agreement enters into force 60 days after both parties confirm in writing that their legal procedures are complete.[12] As of September 2026 it had not entered into force, because neither government had completed those procedures, yet Dhaka was continuing to execute purchases, including a Gunvor LNG deal cleared on 12 August, US wheat and Boeing aircraft. Neither government has explained what replaces the reinstatement clause now that the reciprocal tariff it referred to has been struck down.[13]

Termination, consultation and reinstatement

Either party may terminate by written notice, effective 60 days later or on an agreed date. If the United States finds non-compliance it must first seek consultations, and may then reinstate the earlier reciprocal tariff rates. Amendments require both parties' written consent and cannot reduce benefits already granted.[12] The 60-day exit is the government's main answer to critics, but terminating would sit uneasily with the forced-labour commitments that appear to underpin Bangladesh's lower Section 301 tier.

What the US–Bangladesh reciprocal trade agreement means for business

For Bangladeshi exporters, the immediate duty is the Section 301 rate plus MFN duty, not the 19 per cent in the reciprocal trade agreement; contracts should allocate tariff changes between order and shipment and provide for repricing if a cotton-content quota opens. For US suppliers, the market-access commitments are not yet enforceable. For everyone, forced-labour due diligence on inputs is now a condition of US entry.

WTO commitments behind every agreement

Every agreement above sits within WTO law. Bangladesh's bound tariffs and MFN obligations set the baseline from which preferences are measured, and regional agreements must fit the WTO's rules on free trade areas or the Enabling Clause. The reciprocal trade agreement with the United States raises the sharpest WTO question, because preferential access for one partner outside a free trade area is in tension with MFN treatment.

Our guide to the WTO impact on Bangladesh trade covers special and differential treatment, the TRIPS waiver and dispute settlement; our anti-dumping guide covers trade remedies; and our analysis of international trade law in Bangladesh sets out the domestic control, customs and import-policy framework.

The pipeline: Korea, the EU, the UAE and RCEP

The commerce ministry's October 2026 briefing set out the next generation of agreements. Negotiations on a CEPA with the Republic of Korea are complete and await cabinet approval, with signing targeted by December. UAE CEPA talks reached a third round in March, with completion targeted by year-end. Four rounds with Singapore are complete. Malaysia has finalised terms of reference for a 20-chapter FTA, with a first round in Dhaka on 27 to 29 October. Draft PTA texts have been exchanged with Nepal, and FTAs are also being pursued with New Zealand, Türkiye, Canada and Mauritius.[3]

The European Union is the agreement that matters most. Prime Minister Tarique Rahman wrote to European Commission President Ursula von der Leyen in April seeking an FTA; both sides have appointed negotiating teams, and initial online discussions were expected in late October or November.[3] An EU agreement would be the only durable substitute for Everything But Arms, but it would require Bangladesh to open its own market to EU goods and accept commitments on labour, environment and procurement of a kind it has not made before.

Using Bangladesh trade agreements: a step-by-step process

Whether you export from Bangladesh or import into it, the same sequence decides whether a preference is available and whether it survives a customs audit.

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Contract drafting for preference-dependent trade

A supply agreement priced on a preferential duty rate is a bet that the agreement stays in force, the goods keep qualifying under its rules of origin and the importing country keeps accepting the certificate. In 2026 several of those assumptions failed.

Price-adjustment clauses should identify the duty assumption expressly and say who bears a change. Change-in-law clauses should cover not only statutes but tariff notifications, the withdrawal of preferences and the end of LDC treatment. Origin warranties should require the supplier to provide the bills of materials and production records needed to defend a claim, and should survive termination for the period in which customs can reopen an entry. For US-bound goods, forced-labour representations and audit rights over inputs are now standard.

Mistakes to avoid

The costliest mistakes are claiming under an agreement that is signed but not in force; using the wrong certificate or the wrong scheme; assuming LDC origin thresholds survive graduation; relying on a press summary of a sensitive list; and pricing long-term contracts on EBA access with no mechanism for the 2029 transition.

Working with an international trade lawyer in Bangladesh

Trade agreement work is part customs law, part treaty interpretation and part commercial drafting. An international trade lawyer in Bangladesh should be able to read a schedule of concessions, test a product against its rules of origin, run the customs appeal if a claim is refused, and draft the contract that allocates the risk.

TRW advises exporters, importers, foreign investors and industry associations on preferential trade, customs disputes and market access. Our customs and trade compliance practice handles origin, classification and customs disputes, and our export licensing and market access practice advises on preference schemes and agreement strategy. Exporters will also find our export law guide useful on registration, repatriation and incentives.

What to watch to 2027

Four decisions will shape Bangladesh trade agreements over the next year. First, the General Assembly's decision on LDC graduation, which sets the clock for EBA and every other LDC preference. Second, entry into force of the Japan EPA and signature of the Korea CEPA. Third, the launch of EU FTA talks and the application of the new EU GSP Regulation from 1 January 2027. Fourth, whether the two governments bring the reciprocal trade agreement into force, renegotiate it or let it lapse, and whether the textile quota opens.

Do not wait for those decisions. Origin files, contract clauses and sourcing take months to change, and preparing for a graduation that is deferred costs far less than being caught by one that is not.

Frequently asked questions

What trade agreements does Bangladesh have in force?

The main agreements in force are SAFTA, APTA, the D-8 Preferential Trade Agreement and a 2020 preferential trade agreement with Bhutan. The Japan EPA and the US Agreement on Reciprocal Trade have been signed but were not in force in October 2026.[3] [5] [7]

Does Parliament have to ratify Bangladesh trade agreements?

No. Article 145A of the Constitution requires treaties to be submitted to the President and laid before Parliament, but ratification is an executive act.[1]

When does Bangladesh graduate from LDC status?

Graduation is scheduled for 24 November 2026. Bangladesh has asked for the date to be moved to 24 November 2029, and a General Assembly decision was expected in October 2026.[2]

Will Bangladesh lose EU duty-free access immediately on graduation?

No. Everything But Arms continues for a three-year transition after graduation, which would end around late 2029 on the current timetable.[9]

Can Bangladesh qualify for EU GSP+ after EBA?

Only with difficulty. GSP+ now requires 32 conventions, and preferences are suspended where a section's share of EU GSP imports exceeds 37 per cent, a threshold Bangladeshi apparel would likely cross.[9]

Is the Japan EPA in force?

Not yet. It was signed on 6 February 2026 and was awaiting ratification in October 2026. No EPA preference can be claimed until it enters into force.[3] [4]

What tariff does the US charge on Bangladeshi goods now?

Since 24 July 2026, a 10 per cent Section 301 duty on top of MFN duty, covering about 99.4 per cent of Bangladesh's exports to the US, rather than the 19 per cent rate in the reciprocal trade agreement.[14]

Is the US–Bangladesh reciprocal trade agreement legally binding?

It is a signed treaty described as legally binding, but it enters into force only 60 days after both sides confirm completion of domestic procedures, and that had not happened by September 2026.[11] [12] [13]

Can Bangladesh withdraw from the US agreement?

Yes. Either party may terminate by written notice, effective 60 days later or on a mutually agreed date.[12]

Does BIMSTEC give Bangladeshi goods any tariff preference?

Not yet. The goods agreement, rules of origin and related instruments under the BIMSTEC framework were still being negotiated in 2025.[8]