Bangladesh is set to begin formal negotiations with the European Union in September on a proposed free-trade agreement (FTA), as the country moves to secure long-term market access ahead of its LDC graduation.
A senior Commerce Ministry official says the ministry's FTA wing has already completed its preparatory work.
"The paperwork is done. We are now ready for the next steps," the official adds.
Formal talks are expected to begin in the second week of next month, although details as to whether the delegations will meet in Europe or in Bangladesh are still being finalised.
The ministry is prioritising the removal of non-tariff barriers (NTBs) and improvements in trade facilitation, including the introduction of a national single-window system. It is also preparing a pool of trade experts to support the negotiations.
"We are addressing issues raised earlier by the EU and working to improve the overall business environment," the official told The Financial Express.
Commerce Minister Khandakar Abdul Muktadir has said Bangladesh is pursuing FTAs with major partners, including the EU, to safeguard preferential market access after graduation from the least-developed country (LDC) status.
"We are working to ensure continued market access for Bangladeshi exporters before graduation," he said.
The EU has also signalled its readiness for exploratory talks but has urged Bangladesh to take concrete steps to remove NTBs and improve the investment climate. Both sides have already discussed trade facilitation, regulatory reforms and investment conditions.
Regarding the FTA with the European bloc, BGMEA President Mahmud Hasan Khan has said informal discussions on the agreement have already begun, while formal negotiations are expected to start in September.
"Bangladesh would also wait for the UN General Assembly, as any delay in the country's LDC graduation would provide some relief to exporters. However, FTA negotiations would continue regardless of the outcome of the graduation process."
BKMEA President Mohammad Hatem says the government has formed a committee and is working on the issue, while the business community is also assisting the government.
He says discussions on the FTA are expected to begin in September and Bangladesh should conclude the negotiations as soon as possible. "With India and Vietnam already having FTAs with the EU, Bangladesh could face intense competition in the European market if it fails to secure a similar agreement."
He feels that Bangladesh should aim to conclude the FTA before 2029 to safeguard its competitiveness on the EU market.
Talking to the FE, Policy Exchange Bangladesh founder Dr M. Masrur Reaz said a comprehensive FTA would be crucial for Bangladesh to remain competitive on the EU market after LDC graduation and the gradual phase-out of preferential schemes.
"Bangladesh has to put together a very serious diplomatic effort to secure the EU's formal interest in starting the FTA negotiations," he added.
The EU remains Bangladesh's largest trading partner, accounting for 21.5 per cent of the country's total goods trade in 2025, according to the European Commission.
According to the EC data, two-way merchandise trade stood at €23.3 billion in 2025, with the EU recording a €19.1-billion deficit. Apparel and textiles made up nearly 94 per cent of Bangladesh's exports to the bloc, while EU exports were led by machinery, appliances and chemicals.
Despite strong trade flows, investment remains limited. EU foreign direct investment stock in Bangladesh stood at €2.5 billion, as of 2024, compared to €86 million from Bangladesh in the EU.
Bangladesh currently benefits from duty-free, quota-free access under the EU's Everything But Arms (EBA) scheme. After LDC graduation, it is expected to retain EBA preferences for three more years, until 2029, and may later seek GSP+ status to maintain preferential access.
Strategic push for post-LDC trade: Dhaka is pursuing FTAs with multiple partners as part of its post-LDC strategy to diversify export markets and reduce reliance on unilateral preferences.
The urgency has increased as competitors such as Vietnam already enjoy an FTA with the EU, giving them stronger market positioning.
EU Ambassador Michael Miller earlier said the bloc is ready for exploratory FTA talks and had already shared a proposal with Bangladesh. Discussions have also covered NTB removal, trade facilitation and investment reforms.
A broader Partnership and Cooperation Agreement (PCA) is also under negotiation, covering trade, governance, human rights, climate action and sustainable development.
Talking to the FE, Dr Mostafa Abid Khan, component manager of the Support to Sustainable Graduation Project (SSGP) and a former member of the Bangladesh Trade and Tariff Commission, said the EU had given Bangladesh a list of non-tariff barriers (NTBs) that it needs to address before starting negotiations.
"If the government addresses these issues beforehand, it will help create a favourable environment at the negotiation table," he said.
The new government is also keen to undertake various reforms, and the trade-negotiation expert notes that the FTA discussions could help facilitate those reforms. "We have to start this immediately, as the trade bloc is an export destination for 45 per cent of our goods," he said.
As Bangladesh's major trading partner, signing an FTA with the EU could be a significant move for the country.
In the EU market, Bangladesh's major apparel competitor India is set to secure duty-free market access, while Vietnam will also enjoy the same facility by 2029 under its FTA with the bloc.
"It might also play a major role as the country is scheduled to graduate from the least-developed-country status," he added.
He also suggests that, beyond signing trade agreements, Bangladesh must complete the necessary reforms to facilitate smooth trade.
