Bangladesh and Malaysia will begin the first round of negotiations on a proposed free trade agreement (FTA) in Dhaka in late October, as both sides move to conclude the deal by December 2027.
A Malaysian delegation is expected to visit Dhaka for the talks, Bangladesh High Commissioner to Malaysia Md Monzurul Karim Khan Chowdhury said on Thursday.
The first round will cover market access, business opportunities and other issues of mutual interest, according to senior officials of Malaysia’s Ministry of Investment, Trade and Industry.
Dr Rashidi Said, a senior official of the ministry, also confirmed that the first round of negotiations under the proposed Malaysia-Bangladesh FTA (MBFTA) would be held in Dhaka towards the end of October.
The development follows an agreement reached during Prime Minister Tarique Rahman’s visit to Malaysia in June. The two countries set a target in their joint statement to conclude a comprehensive and forward-looking FTA by 2027.
The proposed agreement is particularly significant for Bangladesh as it prepares to graduate from the least developed country (LDC) category.
Bangladesh currently enjoys preferential or duty-free market access in several destinations as an LDC. As such preferences are gradually reduced or changed after graduation, trade agreements could become increasingly important for maintaining the competitiveness of Bangladeshi exporters.
An FTA with Malaysia could help expand exports of readymade garments, leather and footwear, processed food, agricultural products and other goods to the Malaysian market.
It could also provide a structured framework for bilateral trade in fuel, machinery, iron and steel and other industrial inputs imported by Bangladesh from Malaysia.
Focus on market access
The High Commissioner said the October talks would be an important step towards advancing the FTA process and meeting the 2027 target.
MATRADE Deputy Chief Executive Officer Joy Shankar said Malaysia was keen to strengthen trade ties with Bangladesh and was working with the country to facilitate bilateral trade.
Under an FTA, partner countries generally provide preferential market access through tariff concessions and other trade facilitation measures, while agreements can also cover investment, services and wider economic cooperation.
Bangladesh and Malaysia already have substantial bilateral trade, but they do not have a comprehensive bilateral FTA. Businesses therefore do not currently enjoy the preferential tariff and wider market-access benefits that such an agreement could provide.
Halal trade potential
The High Commissioner also highlighted the potential to expand Bangladesh’s halal-product exports to Malaysia.
He said several Bangladeshi products had received halal certification from Malaysia’s halal authority, JAKIM, while Bangladesh’s Islamic Foundation had also received recognition for halal certification.
However, recognition alone would not be sufficient, he said, stressing the need for the Islamic Foundation to strengthen its technical capacity.
The High Commissioner made the remarks after visiting stalls of Bangladeshi companies participating in the Malaysia International Halal Festival (MIHAJ) in Kuala Lumpur.
Representatives of PRAN, Apex Convenience Foods, Ghorer Bazar, Paragon Agro, Talukdar Agro Foods and Beverage, Nourish Foods and Biopharma were among those he met during the visit.
The discussions covered business and trade opportunities involving Bangladeshi products in the Malaysian market.
The October negotiations will therefore be the first formal step towards translating the political commitment made by the two countries into a trade agreement covering market access and broader economic cooperation.