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The government will soon launch a feasibility study to identify priority areas for negotiating a free trade agreement (FTA) with the European Union (EU), officials said. The move is aimed at protecting Bangladesh’s preferential trade benefits after it graduates from Least Developed Country (LDC) status in November next year.

Commerce Secretary Mahbubur Rahman said an inter-ministerial meeting will be held next month to seek formal input from other ministries and agencies. “A meeting planned earlier to discuss feasibility had been deferred due to other commitments and rescheduled for next month,” he noted.

The EU, Bangladesh’s largest export market, imports over $25 billion worth of goods annually, accounting for more than 60 percent of the country’s total shipments. Currently, Bangladesh enjoys duty-free access under the EU’s LDC scheme, which has been extended until 2029. After that, exporters could face tariffs of about 12 percent unless an agreement is reached.

Bangladesh is also negotiating GSP Plus benefits with the EU, which would allow duty-free access post-graduation. However, GSP Plus requires ratification of 32 international conventions, including four core ones on governance, human rights, labour rights, and environmental protection, which have stringent conditions.

“Bangladesh has signed most of the conventions, but four to five remain difficult due to strict conditions,” Rahman said. He added that an FTA may be a more practical alternative, as it allows negotiation of trade in goods, services, and Rules of Origin without the rigid constraints of GSP Plus.

Experts note additional challenges for garment exports, Bangladesh’s main export item. Under GSP Plus rules, a safeguard clause applies a six percent threshold per product, while Bangladeshi garments have crossed 21 percent. A country’s share of EU imports under LDC, GSP, and GSP Plus categories is capped at 37 percent, but Bangladesh already exceeds 50 percent.

Mohammad Abdur Razzaque, chairman of local think tank RAPID, said, “Bangladesh will have to negotiate intensively with the EU to remove stringent conditions if it wants to secure GSP Plus status.”