Experts worry that Bangladesh's exports might shrink and industries will suffer setbacks if the country joins a new free-trading bloc called RCEP, unless its privileged market access is secured.
At a recent high-profile meeting, experts said exports to many of the Regional Comprehensive Economic Partnership (RCEP) countries could fall in the range between 9% and 31% unless preferential market-access facilities were available during the post-graduation era.
These countries and probable export losses are: Japan 30.53%, South Korea 27.53%, New Zealand 11%, Australia 11%, Thailand 8.93% and China 8.29%, according to sources.
Keeping this prospect in view, the meeting suggested assessment of all possible aspects and challenges before joining in the vast economic bloc.
The Ministry of Commerce convened the meeting, as part of doing homework ahead of negotiations, to review possible benefits and risks of joining the China-backed economic grouping-the latest of a numerous blocs proposed or in the making in the region and beyond lately.
Besides, a good number of the country's industrial units may be hurt, save apparel, beverages and tobacco, according to the views elicited from the meeting.
However, investment volume will increase, by an estimated 3.36%, and that might create a positive impact on bilateral trade with RCEP member-nations as it is a Mega Regional Trade Agreement (RTA).
Before accession into the RCEP, Bangladesh has decided to further review the possibilities and challenges in terms of industrial capacity, overall revenue risk, investment potential, service sector, regional value chain and e-commerce, according to the meeting minutes.
It has also decided to take political guidance regarding the initiation of the accession process of Bangladesh into the world's largest alliance.
Bangladesh has decided to look into the inclusion process of Hong Kong and Macau into RCEP as they have applied recently for joining it.
The meeting discussed the necessity of a study on what will be the market access of Bangladeshi potential products and how much investment may come into Bangladesh from the RCEP countries.
The RCEP, which came into being in January 2022, is a free-trade agreement (FTA) between the ten member-states of the Association of Southeast Asian Nations (ASEAN) and the others.
The ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam and its five FTA partners are Australia, China, Japan, New Zealand and the Republic of Korea.
Being the world's largest free-trade turf, the 15 RCEP-participating countries account for almost half the world population and contribute about 30 per cent to global GDP and over a quarter to world exports.
The volume of export of Bangladeshi goods in the area stood at $3.9 billion and imported goods worth $24.5 billion in FY21.
On the other hand, at the same time, the volume of services export was $1.8 billion and imports worth $2.6 billion in the same period.
Bangladesh currently gets preferential market facility in many of the RCEP countries in the form of preferential trade agreement (PTA) or GSP facilities.
Many developed countries would not provide duty-free facilities to Bangladesh after its graduation from the LDC status in 2026 and get exposed to open competition in its external trade after 2029.
The study mentioned that RCEP includes some of the major export destinations as well as major import sources of Bangladesh.
Considering the bilateral-trade scenario, RCEP remains more as an important partner from the Bangladesh perspective.
Imports from RCEP contribute around 43.92% of the total global imports of Bangladesh, 55.33% of the total tax revenue and 58.56% of total revenue from customs duty collected under home consumption, as of FY21.
Since some major import sources of Bangladesh, like China, Japan, Thailand, South Korea, Indonesia, Malaysia and Australia, are involved with RCEP, there is a threat of losing a certain amount of revenue from these countries.
More than 68% of total merchandise exports to RCEP are under the apparel-product category.
Top 20 export items to RCEP mostly consist of apparel products and these twenty products constitute 64% of total export items.
It says the probable increase in import along with a comparatively protective regime of Bangladesh estimated a probable high revenue loss for Bangladesh compared to that of the RCEP.