Dhaka: South Korea and Bangladesh have reached an agreement in principle on a comprehensive economic partnership agreement (CEPA), as announced by Seoul's industry ministry. This development marks a significant step for South Korea in its efforts to bolster its presence in the South Asian market.
According to Yonhap News Agency, the agreement was achieved during discussions between South Korea's Trade Minister Yeo Han-koo and his Bangladeshi counterpart, Khandaker Abdul Muktadir, in Dhaka. The agreement in principle signifies that the primary provisions of the pact have been negotiated, while remaining technical matters will be addressed through further working-level consultations.
A CEPA is a form of free trade agreement that encourages broader economic cooperation beyond mere market liberalization, encompassing investment and other aspects of economic collaboration. The negotiations for the CEPA between the two nations began in November 2024 and were concluded after five rounds of formal discussions.
The Ministry of Trade, Industry and Energy stated that the agreement is anticipated to enhance South Korea's foothold in the South Asian market, improve access for Korean consumer goods, and expand infrastructure and industrial cooperation efforts. Bangladesh, with its population of approximately 170 million, is noted as the world's eighth-most populous country and one of South Asia's rapidly growing economies.
This agreement positions Bangladesh as the second South Asian country after India to conclude a CEPA with South Korea, highlighting it as the largest new free trade agreement partner secured by the current administration. Under the terms of the agreement, both countries have committed to eliminating tariffs on key products as part of their market-opening commitments.
Specifically, tariffs on Korean domestic products, including instant noodles, processed coffee, seasoned seaweed, and confectionery items, will be abolished. Bangladesh has also agreed to remove tariffs on diesel fuel, which is South Korea's top export item to the country, as well as on complete knock-down kits for vehicles and all automotive parts. Furthermore, the agreement ensures tariff elimination on products like lubricant base oils and washing machines, which were not covered under previous free trade agreements.