It emerged this week that Bangladesh is leaning towards joining the Regional Comprehensive Economic Partnership (RCEP), touted as the world's largest trading bloc, with an eye on increasing trading relations with countries in the Indo-Pacific region. Reportedly, the Ministry of Commerce is expected to send a formal proposal to the RCEP depository and temporary secretariat at the Association of Southeast Asian Nations (ASEAN) headquarters for the country's membership by September.

The decision to join the forum emerged from a workshop on the issue in Dhaka this week, with senior commerce secretary Tapan Kanti Ghosh in the chair. Participants at the workshop expressed their opinion in favour of signing a free-trade agreement (FTA) with the RCEP members with an eye to facing post-LDC graduation challenges. Participants at the workshop agreed that the commercial and strategic importance of Bangladesh will be boosted by joining the bloc. The country is set to graduate from the club of Least Developed Countries (LDCs) in 2026.

The RCEP is a free trade agreement among the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. The 15 member countries account for about 30% of the world's population (2.2 billion people) and 30% of global GDP ($29.7 trillion), making it the largest trade bloc in history. Signed in November 2020, RCEP is the first free trade agreement among the largest economies in Asia, including China, Indonesia, Japan, and South Korea. Since coming into force in January 2022, it has been considered a high-quality, modern and comprehensive agreement between the 10 member-states of ASEAN and its five FTA partners.

A study conducted last year by the Bangladesh Trade and Tariff Commission showed Bangladesh's trade with RCEP- member countries at present is mostly concentrated on trade in goods. Bangladesh's exports may grow by some 17 percent and gross domestic product (GDP) may receive a 0.26 percent if the free-trade agreement is signed with the bloc members, the study mentioned.

Having said all that, our record in negotiating or entering into FTAs with other nations leaves much to be desired. Bangladesh currently has limited trade agreements with other developing countries, but no FTAs. In this regard, Prime Minister Sheikh Hasina revealed earlier this year that negotiations are currently ongoing with some 11 different countries, with a view towards entering into FTAs with them. The Commerce Ministry had earlier announced a time-bound action plan on preferential market access and trade agreements to face the challenges of LDC graduation. In the action plan, China, India, Japan, Korea, Singapore, Canada and Malaysia were listed as potential FTA partners, while the Russia-led Eurasian Customs Union and the RCEP were named as potential blocs the country could join.

The UN has strongly recommended that Bangladesh sign FTAs with major trading partners to counter a future without duty-free access facility following the graduation to developing country status, even though some countries have promised to allow a certain grace period for Bangladesh to adjust to the new realities. Such agreements may prove vital for Bangladeshi products to remain competitive in the international market.