Bangladesh expects LDC deferment decision this month

Bangladesh expects a decision this month on its request for a three-year extension of the preparatory period for graduation from the least developed country (LDC) category, Commerce Minister Khandakar Abdul Muktadir said yesterday.

“We are expecting the decision on the LDC graduation deferment within the next week. If it is delayed for any reason, the final decision will come within this month,” he said at a seminar on Bangladesh’s LDC graduation trajectory and challenges at the Economic Reporters’ Forum (ERF) office in Dhaka.

The seminar was jointly organised by the ERF and the Bangladesh Foreign Trade Institute (BFTI).

The G-77 group of developing countries has proposed deferring Bangladesh’s graduation, while the European Union (EU) has supported the country’s request for a three-year extension.

Following Bangladesh’s request, the UN Committee for Development Policy (CDP) recommended an extension but did not specify a timeframe. The UN Economic and Social Council (ECOSOC), however, has recommended that the UN General Assembly (UNGA) grant Bangladesh a three-year extension.

As part of its preparations for graduation, Bangladesh has signed trade agreements with major partners, including Japan and South Korea, to help retain duty-free market access after leaving the LDC category. Negotiations on a trade agreement with the United Arab Emirates are expected to be completed next month.

Bangladesh also expects to conclude negotiations on trade agreements with Oman, Singapore, New Zealand and eight to 10 other countries by the end of this year or next year as part of its preparations for a smooth transition.

The minister expressed hope that negotiations on a free trade agreement with the EU, Bangladesh’s largest export destination, would be completed before the country’s scheduled graduation in 2029. Both sides have already appointed chief technical officers for the negotiations, he said.

Bangladesh has also shared a time-bound action plan with the EU outlining its preparations for a smooth transition, as the country expects to secure a three-year extension, he added.

The country is also working to join the Regional Comprehensive Economic Partnership (RCEP), a major regional trade agreement. The RCEP has established a working group to assess Bangladesh’s application to join the trade bloc.

BFTI Chief Executive Officer Mostafa Abid Khan said more than 93 percent of Bangladesh’s exports would not be affected during the first two years after graduation.

Major trading partners and blocs, including Canada, Japan, the UK and the EU, which together account for more than 86 percent of Bangladesh’s exports, have agreed to continue duty-free market access for three years after graduation, he said.

Abid Khan urged Bangladesh to sign trade agreements with major trading partners to preserve duty-free market access after graduation and avert a potential 26 percent fall in exports.

Bangladesh, Nepal and Lao PDR are scheduled to graduate from the LDC category on November 24 unless the UNGA grants an extension.

Bangladesh and Nepal have sought an extension of the preparatory period before graduation. Such an extension would give them more time to prepare for the loss of LDC-specific trade preferences and other support measures.

After coming to power in February this year, the BNP government sent a letter to the chair of the CDP requesting that Bangladesh’s preparatory period be extended until November 24, 2029. The letter said the country needed more time to prepare for competition in international markets after graduation.

The UN has also established a working group to review and update its support framework for countries graduating from the LDC category. The Working Group on Smooth Transition for Graduating LDCs will be led by the permanent representatives of Angola and Finland, according to a ministerial declaration of the 81st UNGA.