Japan is pushing to ratify its landmark economic partnership agreement (EPA) with Bangladesh during the current parliamentary session, in a move aimed at strengthening economic ties with Dhaka and countering China's growing influence in South Asia.
According to a report by Nikkei Asia, Japan's Foreign Ministry wants the agreement approved swiftly as Bangladesh prepares to graduate from the United Nations' least developed country (LDC) category.
The agreement, signed in February, is Bangladesh's first EPA with another country. It is expected to take effect in the first half of 2027, subject to the completion of domestic legal procedures in both countries.
But Tokyo's ambitions extend beyond tariff reductions.
Japan has helped Bangladesh negotiate and draft the agreement, providing technical expertise intended to protect Dhaka from accepting potentially unfavourable conditions in future trade negotiations, particularly with China.
"China will always formulate various economic agreements with its own interests in mind," a senior Japanese Foreign Ministry official told Nikkei Asia.
China is Bangladesh's largest source of imports and an increasingly important partner in infrastructure development and security cooperation.
Since the fall of Sheikh Hasina's India-friendly government in August 2024, Dhaka has sought closer cooperation with Beijing, particularly in infrastructure and defence-related sectors.
Japan, already a major development partner of Bangladesh, is seeking to strengthen its economic position as China's regional influence expands.
According to Nikkei Asia, Tokyo's involvement in drafting the EPA went considerably further than conventional tariff negotiations.
Japanese officials helped Bangladesh assess which sectors should receive tariff concessions, which domestic industries required protection and how individual provisions could affect the economy.
They also examined potential risks associated with the agreement and outlined the domestic legal arrangements needed for implementation.
The objective was to give Bangladesh greater negotiating capacity and reduce its vulnerability to unfavourable terms in future trade agreements.
Japan hopes the EPA will become a template for Bangladesh's negotiations with other countries.
Tokyo is drawing on its experience with major international trade arrangements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
For Bangladesh, the agreement could provide important protection against the loss of preferential trade benefits following LDC graduation.
Bangladesh is scheduled to graduate from the LDC category in November 2026. The transition could eventually expose its exports to higher tariffs in several developed markets as existing preferences expire.
Under the EPA, Japan will eliminate tariffs on garments and textile products imported from Bangladesh.
The concession is particularly important for Bangladesh's export-oriented clothing industry, which depends heavily on access to overseas markets.
Without preferential arrangements, higher import duties could make Bangladeshi products less competitive.
In return, Bangladesh will gradually eliminate tariffs on Japanese automobile engines and tyres over 15 years.
Japanese passenger vehicles will also receive treatment comparable to that granted to vehicles from other trading partners.
The agreement is expected to strengthen bilateral trade while giving Japanese manufacturers improved access to Bangladesh's market.
The agreement comes as Japan seeks to maintain its economic influence across South and Southeast Asia amid intensifying competition with China.
For Bangladesh, the EPA offers an opportunity to diversify its economic partnerships without abandoning its extensive trade relationship with Beijing.
For Japan, it provides a means of strengthening Bangladesh's negotiating capacity while promoting a rules-based trade framework.
Nikkei Asia reported that Japan views the agreement as an example of how its experience in international trade negotiations can help emerging economies become more economically self-reliant.
The immediate priority, however, is parliamentary ratification.
Both countries must complete their domestic approval procedures and formally notify each other before the agreement can enter into force.
If implemented as planned in the first half of 2027, the EPA will mark a significant change in Bangladesh's trade relations with Japan.
It could also establish a precedent for how Dhaka negotiates future agreements with other major economies, including China.
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