Bangladesh has signed a Comprehensive Economic Partnership Agreement with South Korea, opening preferential access for 97 percent of Bangladeshi goods to the Korean market, valued at about $2 trillion. The agreement marks Bangladesh’s second full-fledged trade pact with a major Asian economy, following the Economic Partnership Agreement signed with Japan on February 6.

Under the new deal, 87 percent of South Korean goods will also receive preferential access to Bangladesh. Commerce Minister Khandakar Abdul Muktadir and South Korean Trade Minister Han-Koo Yeo announced the agreement at a joint press conference in Dhaka. The pact extends beyond tariff reductions, covering trade in goods and services, investment, and rules of origin. Han-Koo described the agreement as a historic milestone in more than 50 years of bilateral relations. He highlighted the long economic partnership between the two countries, particularly in textiles, including investment by South Korea’s Youngone.

He said Bangladesh’s large population and industrial base make the country attractive to Korean businesses, while global companies seeking to expand or diversify increasingly see Bangladesh as a distinctive destination for trade and investment. The agreement is part of Bangladesh’s preparations for graduation from the least-developed country category, which could put export earnings worth as much as $17.5 billion at risk. Bangladesh is seeking stronger market access and investment ties to reduce the potential pressure created by the loss of existing trade preferences after graduation.

The deal therefore carries both immediate commercial significance and longer-term strategic importance for the country’s export-led economic transition in coming years. Muktadir said agreements such as the CEPA with South Korea could help Bangladesh become a trillion-dollar economy by 2034. He added that negotiations are continuing with nearly a dozen countries and trade blocs, including the European Union and the Regional Comprehensive Economic Partnership.

Bangladesh is aiming to attract more Korean investment while securing duty-free export opportunities for garments, leather, jute, and jute products. Trade figures show growth. Bangladesh exported goods worth $421 million to South Korea in the last fiscal year, a decline of 9 percent, according to Export Promotion Bureau data. Bangladesh imported goods worth $614 million from South Korea during the July-to-December period of the last fiscal year.

In fiscal 2024-25, imports from South Korea reached $1.2 billion, rising 33 percent year on year, Bangladesh Bank data showed. Business and policy leaders welcomed the agreement. Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development, said the deal sends a positive signal that Bangladesh can negotiate with economies. M Masrur Reaz, chairman of Policy Exchange Bangladesh, called it encouraging for trade integration and urged Bangladesh to pursue similar agreements with the European Union and RCEP.

Faruque Hassan, a former president of the Bangladesh Garment Manufacturers and Exporters Association, described the deal as a positive step, while stressing that Bangladesh must study the Korean market carefully to gain maximum benefit. Meanwhile, Bangladesh’s request to delay its least-developed country graduation by three years, until 2029, is awaiting consideration at the United Nations General Assembly in New York next month.