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Dhaka-Seoul Economic Partnership Agreement Unlocking bilateral trade potentials

Dhaka-Seoul Economic Partnership Agreement Unlocking bilateral trade potentials

KATHMANDUBangladesh has close relations with South Korea. Back in 1974, South Korea established its embassy in Dhaka, and in 1987, it erected an embassy in Seoul. Bilateral relations between the two nations have only been stronger since then. Korea, the eleventh-largest economy in the world and the fourth-largest in Asia, is one of the key areas of bilateral relations between Bangladesh and Korea. Other areas include business, politics, investment, recruiting the Bangladeshi labor force, cultural exchange, higher education relations, technical assistance, etc. Bangladesh’s current level of economic investment and labor force exportation is largely due to the efforts of the Korean government and people.Korea provided early technical support to flourish Bangladesh’s garment industry, which is seen as the primary pillar of Bangladesh’s current export sector. With this assistance, the industry has progressively advanced to its current consolidated position. However, through a variety of channels, Bangladeshi laborers moved to South Korea to find employment by the end of the 1970s. Since then, our skilled and semi-skilled laborers have significantly contributed with their arduous effort to the ongoing development process that began in Korea. Bangladesh-Korea relations stand on a rock-solid foundation in terms of bilateral political and economic ties. In 2022, bilateral trade between Bangladesh and South Korea reached $3.035 billion, with Bangladesh exporting $678 million and South Korea importing $2.357 billion.

To increase bilateral commerce and investment, Bangladesh and South Korea are moving towards a bilateral instrument such as the Economic Partnership Agreement (EPA), which will pave the way for a future FTA. The proposed trade instrument seeks to enhance economic growth via trade linkages, broaden investment prospects, and acknowledge the need for technological innovation and human resource development. It also contains clauses that support collaboration in the areas of technology, research, innovation, human resource development, and trade and investment promotion. The proposed EPA also seeks to enhance the private sector’s involvement in both nations, particularly that of small and medium-sized businesses (SMEs). The proposed Memorandum of Understanding (MoU) calls for knowledge sharing, joint work on trade facilitation issues, efficient execution of the WTO trade agreement, and simplification of customs clearing processes.

However, an Economic Partnership Agreement (EPA) between Dhaka and Seoul can play an important role in strengthening the existing bilateral relations between Bangladesh and South Korea. A bilateral mechanism like the Economic Partnership Agreement (EPA) between Bangladesh and South Korea is being actively considered for implementation, which would be a major step towards improving bilateral trade and investment relations. According to media reports, the foreign minister’s recent comments highlight the significance of developing stronger relations between the two countries and indicate a positive direction for economic cooperation.

During a recent meeting, delegates from South Korea and Bangladesh spoke about several ways to further their partnership. From updating air services agreements to exchanging high-level visits, all parties are eager to strengthen current frameworks for their mutual benefit. The focus on modernizing Bangladesh’s industries—particularly the vital Ready-Made Garments (RMG) sector—through direct investments and technology transfer is especially significant.

Furthermore, the Foreign Minister appropriately emphasized the need for establishing new agreements given Bangladesh’s impending departure from the Least Developed Country (LDC) category in 2026. Proactive actions are required to maintain economic momentum and guarantee ongoing growth throughout this shift. Bangladesh seeks to establish mutually beneficial ties with vital allies like South Korea while leveraging the potential of its rapidly growing economy via the exploration of channels such as the EPA.

He acknowledged the historical relationship between Bangladesh and South Korea and conveyed his appreciation for the latter’s steadfast assistance and collaboration over the last fifty years. The latest demonstration of South Korea’s dedication to fostering bilateral ties is shown by the provision of opulent cars and the facilitation of preferential market access for items from Bangladesh.

In addition, he praised South Korea’s position as one of the biggest foreign investors in Bangladesh and offered a cordial invitation for more investment in important areas such as light engineering, electronics, infrastructure, and ICT. The Korea International Cooperation Agency (KOICA) launched the continuing feasibility study for the Metro Rail Project in Chattogram, which is an example of the breadth of bilateral cooperation and the potential for game-changing infrastructure initiatives.

Both countries are actively pursuing workable solutions to issues like language obstacles that affect Bangladeshi-qualified professionals looking for opportunities in South Korea. Programs like language and tech training at approved Technical Training Centers (TTCs) highlight the dedication to overcoming challenges and maximizing the advantages of bilateral collaboration.

Relationships with countries such as South Korea in trade and investment have great potential as Bangladesh navigates its path towards economic progress and prosperity. The investigation of tools such as the EPA and the ongoing sharing of knowledge and technology provide the foundation for a mutually beneficial partnership. Bangladesh and South Korea are well-positioned to initiate a new phase of cooperation, promoting sustainable growth and prosperity for their respective populations, as they share a common dedication to prosperity and advancement.

Bangladesh has gradually gained appeal as a country for foreign direct investment in recent years. Unquestionably, foreign direct investment (FDI) is essential for a country to experience sustained development. South Korea was one of the nations that made significant investments in us in the 1970s after seeing our potential early on. Therefore, the prospect of more investment from the massive East Asian economy is quite encouraging and may potentially revolutionize our path of progress.

It only makes sense for South Korea, a country known for its strong presence in the world of technology through companies like Samsung and LG, to start manufacturing its products right here in Bangladesh, given its expertise in the digitization of industry and our current government’s desire to modernize all aspects of Bangladesh. The commitment of multinational IT behemoths like Samsung and LG to quickly begin production in Bangladesh via a joint venture business would also help to close the trade gap between our two nations. Bangladesh is now in the midst of a fantastic opportunity that South Korea must not pass up. We have already offered South Korean companies hundreds of acres of land to establish special economic zones in an effort to get them to spend more here. We are moving in the direction of a positive growth and investment cycle. An Economic Partnership Agreement (EPA) between Dhaka and Seoul can unlock bilateral trade potential between the two countries.

* Professor Dr. Arun Kumar Goswami, Columnist; Director, Centre for South Asian Studies(CSAS), Dhaka.

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