South Korea, Bangladesh reach trade pact in principle

The industry ministry said Tuesday that South Korea and Bangladesh reached a Comprehensive Economic Partnership Agreement (CEPA) in principle, a pact that would connect Korean businesses to Bangladesh's market of about 170 million people.

Trade negotiations chief Yeo Han-koo and Bangladeshi Commerce Minister Khandakar Abdul Muktadir jointly declared the agreement in Dhaka, the ministry said.

The parties have settled the agreement's main provisions and will resolve remaining technical matters before a formal signing. Talks began in November 2024 and included five formal negotiating rounds and intersessional consultations.

The proposed agreement would be Korea's second CEPA in Southwest Asia after India. The ministry said Bangladesh is the largest market among new FTA partners concluded under the government's trade-diversification strategy. Bangladesh is pursuing FTAs with major countries and membership in the Regional Comprehensive Economic Partnership as it prepares for its November 2026 graduation from least-developed-country status and a potential end or reduction in preferential tariff treatment for its exports.

Yeo said, "We will proceed with follow-up procedures without disruption so that this CEPA can establish itself as a platform for economic cooperation through which both countries can grow together."

The agreement would eliminate tariffs on key Korean industrial exports including diesel and steel, and consumer products such as instant noodles and processed coffee. It would also cover base oil, auto parts and construction machinery, while creating market-entry foundations for construction and engineering services. The agreement would set market-access commitments in about 90 service sectors and permit cross-border data transfers while barring demands to localize computer equipment or transfer source code. It would also introduce investor-state dispute settlement.

Korean exports to Bangladesh rose 76.0 percent from a year earlier to $1.455 billion in the first half of 2026. Total bilateral trade during the same six-month period reached $1.733 billion.

The ministry said it plans industry briefings and a guide explaining how companies can use the agreement.