Bangladesh and Japan are set to sign a memorandum of understanding (MoU) on trade cooperation between, which officials says will act as a precursor to a free trade agreement (FTA).
The signing will take place during Prime Minister Sheikh Hasina's Japan visit on November 29-30, they also said.
Dhaka had long pursued a joint feasibility study to be made aiming to strike an FTA or a preferential trade agreement (PTA) to boost Bangladesh's export to the developed country of Asia.
However, Japan had been reluctant to advance the proposal since any such demand was not raised by its local business community.
As a least-developed country (LDC) Bangladeshi products enjoy duty-and quota-free market access of almost all goods. In fiscal year 2021-22 Bangladesh's export to Japan amounted to $1.35 billion in a modest rise from $1.18 billion in the previous year.
On the other hand, in FY 2020-2021 Bangladesh's imports from Japan cost the country $2.02 billion.
The Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) recently conducted a survey on 300 companies, local firms and Japanese companies operating in Bangladesh, and found majority of them expecting that the two nations should sign a free-trade deal.
Japan's ambassador to Bangladesh, Ito Naoki, at a recent event in Dhaka hoped that bilateral trade between the two countries might reach $20 billion by 2030 from the present volume of over $3 billion since garment export to the East Asian country is growing fast.
He said most of the companies conducting trade between the two countries wanted that the two nations sign an FTA to retain duty privileges after Bangladesh will have graduated from the world's poor-country club in 2026.
However, Naoki said Bangladesh would need to improve business environment to sign any FTA, PTA, or any economic-partnership agreement with Japan.
The Bangladesh Trade and Tariff Commission (BTTC) had earlier studied the pros and cons of signing such a deal with Japan which found that an FTA with Japan would be immensely beneficial to Bangladesh in the post-LDC era.
