Bangladesh has moved closer to joining the world’s largest free-trade bloc. The harder question is what membership would actually deliver.
Trade ministers of the Regional Comprehensive Economic Partnership, or RCEP, agreed in Manila on September 21 to establish an accession working group for Bangladesh, Chile, Sri Lanka and Hong Kong.
The decision formally moves the applicants into negotiations, although it neither guarantees membership nor establishes a timetable. RCEP currently brings together the 10 ASEAN economies with China, Japan, South Korea, Australia and New Zealand.
RCEP covers roughly 30% of global economic output and contains many of the economies from which Bangladesh buys its machinery, textiles, chemicals and industrial inputs but to which it sells remarkably little.
A Bangladesh government-commissioned study puts the imbalance starkly: RCEP economies account for about 53.9% of Bangladesh’s imports but only 7.9% of its exports. In 2023, RCEP members bought just $4.34 billion of Bangladeshi goods, equivalent to only 0.08% of their total imports.
That is both the opportunity and the danger.
The immediate argument for RCEP is Bangladesh’s approaching graduation from least-developed-country status and the gradual erosion of trade preferences that helped build its export economy.
Dhaka has been scrambling to replace unilateral preferences with negotiated trade arrangements. It has already struck an economic partnership agreement with Japan and in August signed a comprehensive economic partnership agreement with South Korea.
RCEP would put Bangladesh inside a much larger regional framework rather than forcing it to negotiate market access country by country.
The potential gains go beyond simply selling more shirts without tariffs.
RCEP creates common trade rules across an economic region stretching from Japan and China to Australia and Southeast Asia. Its rules of origin allow inputs sourced across participating economies to count toward determining whether a product qualifies for preferential treatment.
For Bangladesh, which imports large quantities of fabric, chemicals, machinery and other intermediate goods from Asia, such regional cumulation could make it easier for manufacturers to build supply chains spanning several RCEP economies.
That matters because Bangladesh remains unusually dependent on garments and on European and North American consumers. RCEP would offer a framework for deeper integration into the Asian manufacturing system that has powered the industrialisation of Vietnam and other regional exporters.
The numbers suggest substantial upside, although economic simulations should be treated as scenarios rather than forecasts.
A Commerce Ministry study using a computable general equilibrium model estimates that Bangladesh’s exports could rise between roughly 13.6% and 16.2% under different RCEP liberalisation scenarios. Imports could increase by 13.7% to 17.1%, while the effect on GDP ranges widely — from a 0.74% contraction under one full-liberalisation scenario to a 2.83% expansion under a partial-liberalisation scenario that assumes unemployment.
The variation is important. RCEP itself does not automatically produce growth so what Bangladesh does with the access matters.
Services could also benefit. Bangladesh exported about $1.5 billion in services to RCEP economies in 2023, nearly twice the level of 2014. Construction, professional and business services and transport are important categories, while information technology has emerged as another potential growth area.
But a UN ESCAP study finds Bangladesh still has regulatory and infrastructure weaknesses in ICT, transport and tourism that could limit those gains.
There is another prize: investment.
RCEP economies accounted for around 51% of Bangladesh’s net FDI inflows in fiscal 2023-24 and roughly 39% of its FDI stock. Membership could make Bangladesh more attractive as a manufacturing base because investors would be producing from inside a common regional trading architecture rather than from a country sitting outside it.
But Bangladesh would not simply gain access to RCEP. RCEP would gain greater access to Bangladesh. That distinction is crucial.
Bangladesh has historically maintained relatively high tariffs and supplementary duties, both to protect domestic producers and to generate government revenue. Joining RCEP would require Dhaka to offer commercially meaningful market access and progressively align domestic rules with the agreement. Accession ultimately requires the consent of existing members.
The pressure would be particularly strong because Bangladesh already imports vastly more from the region than it exports there.
China illustrates the problem. Bangladesh imported $18.56 billion of Chinese goods in fiscal 2024-25 but exported only $694 million, producing a bilateral deficit of almost $17.9 billion. Indonesia and Malaysia — both RCEP members — are also among Bangladesh’s major deficit partners.
Lower tariffs could make Asian machinery and intermediate inputs cheaper, improving competitiveness for exporters. But the same liberalisation could squeeze domestic producers of electronics, light engineering, chemicals, plastics and other import-competing products.
Imports are therefore almost certain to rise alongside exports. Bangladesh would also sacrifice some customs revenue, making domestic tax reform more urgent.
And membership would demand reforms beyond tariffs. UN ESCAP identifies investment restrictions, equity limits, data-localisation requirements and regulatory weaknesses among areas where Bangladesh's framework differs from RCEP commitments.
This is why RCEP should not be viewed simply as another duty-free arrangement.
Its larger significance for Bangladesh would be structural: moving an economy built around preferential garment exports to the West toward reciprocal trade and deeper integration with Asian production networks.
The opportunity is sizable precisely because Bangladesh currently sells so little to RCEP. But membership alone will not persuade Japanese, Chinese or Southeast Asian consumers to buy Bangladeshi products. Firms will still need competitive prices, reliable logistics, faster ports, investment and products beyond garments.
RCEP can lower the walls around Asia’s biggest trading ecosystem. Whether Bangladesh can sell through the opening will depend on reforms at home.
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