9 September 2026
10 HOUR(s)
Star Business Report
Bangladesh could unlock roughly $4 billion in additional economic output by making imported materials and other goods used in production cheaper for local industries and securing better market access through free trade agreements (FTAs), according to a preliminary World Bank analysis.The country could also lose roughly $1.1 billion in economic output if it loses existing trade preferences after graduating from the least developed country (LDC) category without securing replacement arrangements, the WB estimates.The findings come from the study “Bangladesh Trade Policy at a Crossroads: Evidence for the National Tariff Policy, LDC Graduation, and the Next Generation of Trade Agreements,” presented at an event hosted by the Policy Research Institute of Bangladesh (PRI) in Dhaka yesterday.The study comes as Bangladesh prepares to graduate from the LDC category on November 24 this year. The government has sought to defer the graduation by at least three years. An initial decision on the deferment is expected later this month.THE GAINSThe potential gains, WB estimates, would come from two sets of reforms.Deeper cuts in tariffs on imported intermediate goods and the removal of additional import duties could raise real GDP by up to 0.52 percent, as per the report.Intermediate goods are products that businesses use to make other products. They include raw materials, components and other goods used in production.Separately, a broad FTA strategy with major trading partners could raise real GDP by 0.73 percent, or about $3.2 billion. The analysis assumes that the agreements would be as comprehensive as those signed by Vietnam.About two-thirds of the gains from the FTA strategy could come from deeper agreements with countries in the Regional Comprehensive Economic Partnership (RCEP) and the Association of Southeast Asian Nations (ASEAN), the WB said.THE LOSSThe World Bank warned that the cost of inaction could be significant.If existing trade preferences disappear without replacement arrangements, real GDP could fall by 0.24 percent, or roughly $1.1 billion, according to the analysis.The losses could be greater if Bangladesh takes no action while rival exporters secure deeper market access.In that scenario, GDP could fall by a further 0.21 percent. Total exports would decline by 2.48 percent and wages of unskilled workers by 0.83 percent.
