The Japan External Trade Organisation (JETRO), Bangladesh Investment Development Authority (BIDA), and the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) jointly organised Economic Summit to map out economic ties between Bangladesh and Japan in the next fifty years. The summit resulted in three MoUs to enhance bilateral trade and investment. Thus, one can argue that the summit is expected to contribute to the promotion of bilateral trade and investment in the coming years. Notably, Japanese Minister for Economy, Trade and Industry Nishimura Yasutoshi arrived in Dhaka on 23 July on a two-day visit to attend the summit and hence to discuss ways to enhance economic cooperation between the two friendly countries. During addressing the summit, Japanese minister said, “I do expect that more companies will come to Bangladesh”.
There are some recent developments to improve bilateral economic ties. For instance, the successful conduct of the first meeting of the Joint Study Group on the possibility of a Japan-Bangladesh Economic Partnership Agreement (EPA) in April 2023 can be cited here. In addition, Bangladesh and Japan recently signed of the Customs Mutual Assistance Agreement with a view to promoting further cooperation between the respective Customs Administrations. Notably, a special Economic Zone for Japan at Araihazar in Narayanganj was inaugurated in December 2022. Such kind of positive development is a good sign to deepen economic ties.
It is worthy to note that many Japanese companies are pulling back from China due to high wages and production costs on the one hand. On the other hand, under the current Sheikh Hasina regime (2009-present), a favourable investment environment has been created in Bangladesh. Thus, Bangladesh can be a good option for Japan. In this context, it is worthy to cite here that according to a survey conducted by Japan External Trade Organization (JETRO), 73.2 percent of the 57 companies interviewed said Bangladesh is their top priority for business expansion; 61 percent said the country has high growth potential.
Currently, nearly 350 Japanese companies are operating in Bangladesh, with more than $380 million in combined investment. In 2022 only, Bangladesh received more than $ 200 million Japanese investment.
It is also encouraging to note that Bangladesh has already started to export ICT products to Japan, which can be a great area to do trade. In this regard, some institutional development becomes necessary.
This write-up argues that Bangladesh and Japan needs to sign the Economic Partnership Agreement (EPA) to promote free trade and to take economic partnership to a new height. The positive development is that in order to sign the EPA, both Dhaka and Tokyo are negotiating. More than 80 percent of the Japanese companies working in Bangladesh want to see the materialization of the EPA to accelerate trade and investment. Thus, as a responsible partner, Japan needs to think about signing the free trade agreement urgently. The free trade agreement can create enormous scope for the private sectors of Bangladesh and Japan to boost bilateral trade and investment.
Japan has been a major development partner of Bangladesh since Bangabandhu’s time. Currently, Japan is working in a number of mega development projects in Bangladesh, including metro rail project which can be game changing events for Bangladesh.
In order to realise the dream of Bangabandhu Sheikh Mujibur Rahman, Sonar Bangla, Japan, has been a true and trusted friend of Bangladesh for the last fifty years. From aid dependence, Bangladesh’s relations with Japan have graduated to a ‘comprehensive development partnership’ focusing on trade and investment. And the bonding between Bangladesh and Japan is getting stronger day by day though there is ample scope to elevate the ties.
The bottom-line is that the economic summit will work as a catalyst to promote Bangladesh-Japan trade and investment in the days to come. And the full potential in the bilateral partnership needs to be realised for the greater benefits of the people of these two nations, of the region or beyond.
– Dr. Md. Shariful Islam is Research Fellow at the KRF Center for Bangladesh and Global Affairs (CBGA, Dhaka). He is also an Associate Professor in International Relations at the University of Rajshahi, Bangladesh.
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