After Bangladesh's graduation from the status as a Least Developed Country to a developing nation, it will lose preferential market access and so it needs to get export benefits by signing up regional trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP).
But ensuring market access is not enough. Bangladesh will also have to see how it can attract more direct foreign investments through the trade deal.
Moreover, it will have to make sure that foreign investors get tariff-free export facility while shipping their products from Bangladesh to the RCEP signatories.
The capacity of both local entrepreneurs and foreign investors has to be strengthened on the supply side and in terms of product quality. At the same time, the government should put emphasis on export diversification.
If Bangladesh has decided to join the RCEP as a strategy to overcome post-graduation challenges, it is a rational step.
However, we cannot gain the targeted benefits only by singing free trade agreements. We need to do some homework to enjoy the advantages of joining the RCEP.
Without transport connectivity, investments, partnerships and trade and logistic facilitation, we will not be able to reap a positive outcome from tariff exemption. Bangladesh needs to focus on developing a value chain and a production network as well.
To get benefits from the RCEP, Bangladesh also has to offer some facilities to other member countries.
As an LDC, Bangladesh is only receiving facilities without having to give anything in return but that will not happen after the LDC graduation. It has to identify what benefits it will offer to other member nations.
Prof Mustafizur Rahman shared his opinion with Abul Kashem of TBS over the phone.
Prof Mustafizur Rahman is a Distinguished Fellow at Centre for Policy Dialogue (CPD)