Iftekhar Rahman
Verdant Global
Bangladesh’s challenge is no longer simply to identify opportunities arising from global realignment. It is to build the institutional capacity to evaluate commitments, implement reforms and measure outcomes consistently.
The anticipated visit of Prime Minister Tarique Rahman to China should therefore be assessed through a practical lens. The relevant question is not merely how many agreements are announced. It is whether the resulting initiatives strengthen productive capacity, resilience and long-term competitiveness. ¹
Diplomatic engagement can create opportunities. It cannot substitute for execution.
Establish a National-Interest Delivery Mechanism
Bangladesh should establish a focused trade, investment and supply-chain delivery mechanism. It should bring together the Ministry of Commerce, Ministry of Foreign Affairs, National Board of Revenue, Bangladesh Bank, investment and economic-zone authorities, port operators, energy agencies and relevant private-sector representatives.
Its purpose should not be to create another broad committee. It should maintain an auditable quarterly scorecard and assign clear institutional ownership for each policy objective.
The scorecard should track export growth by product and destination, the utilisation of tariff-eligible product lines, rules-of-origin compliance, customs-clearance times, port dwell times, industrial energy availability, input concentration by source country, foreign direct investment converted into operational projects, local value addition, employment creation, foreign-exchange exposure and progress on labour and environmental compliance.
This would shift the policy debate from headline announcements to measurable delivery.
Protect Rules of Origin and Customs Integrity
Bangladesh must preserve its reputation as a credible production base.
The Agreement on Reciprocal Trade signed with the United States states that its benefits are intended to accrue substantially to the parties and their nationals. If benefits accrue substantially to third countries or third-country nationals, additional rules of origin may be introduced. ²
This makes anti-circumvention safeguards essential.
Bangladesh should prevent transshipment, false-origin declarations and the routing of third-country goods through domestic facilities merely to obtain tariff advantages. Weak controls could create short-term commercial gains for individual operators while damaging Bangladesh’s wider export credibility.
Larger exporters should implement digital traceability systems capable of recording the origin of fabrics, yarn, accessories and manufacturing processes. Smaller suppliers will need practical assistance to meet the same standards.
Customs modernisation is equally important. Under the US-Bangladesh agreement, Bangladesh is expected to introduce technology solutions by 2030 allowing full pre-arrival processing, paperless trade and digitalised procedures for the movement of US goods across its borders. ³
These reforms should not be treated as a bilateral concession alone. A modern customs architecture would improve efficiency across Bangladesh’s wider trading relationships.
Treat Compliance as a Competitive Asset
International buyers increasingly evaluate supply-chain integrity alongside cost, quality and delivery time. Bangladesh should therefore treat compliance as a commercial asset rather than an external burden.
The US-Bangladesh agreement includes commitments relating to freedom of association, collective bargaining, export-processing zones, labour inspections, forced-labour controls, environmental enforcement, anti-corruption measures and transparent procurement. It also provides for a regularised minimum-wage review mechanism. ⁴
The agreement further requires Bangladesh to submit a full and complete notification to the World Trade Organization of the subsidies it provides within six months of the agreement entering into force. ⁵
These obligations will require coordination across government, employers and industry bodies. They will also require disciplined evidence collection.
Effective implementation would strengthen Bangladesh’s credibility with global buyers, lenders and responsible investors. It would reduce the risk that regulatory concerns become future barriers to market access.
Build Industrial Resilience Without Replacing One Dependency with Another
Bangladesh should strengthen domestic backward linkages, but it should avoid unrealistic assumptions about rapid import substitution.
A 2026 report by the United States Department of Agriculture’s Foreign Agricultural Service illustrates the complexity. Bangladesh imported approximately 1.13 million metric tonnes of yarn valued at US$3.27 billion in marketing year 2024/25. India supplied around 84% of imported cotton yarn, while China supplied approximately 85% of imported man-made yarn. China also accounted for around 70% of imported cotton fabric. ⁶
The same report identified energy shortages, financial stress and logistics disruption as material constraints. Some textile mills reportedly operated at only 30% to 40% of capacity due to inadequate gas supply. ⁷
The appropriate response is a differentiated resilience strategy.
Bangladesh should diversify input sourcing where commercially viable, improve regional inventory arrangements, expand efficient domestic spinning and weaving capacity and assess practical use of the US textile-input mechanism. It should also address the energy constraints that undermine local production.
The objective should not be to replace one concentrated dependency with another. It should be to build a more flexible industrial base capable of responding to supply disruption without sacrificing competitiveness.
Industrial upgrading is equally important. Bangladesh needs to move beyond a narrow concentration in cost-efficient cotton garments towards man-made fibre products, technical textiles, functional apparel, design capability, branding and traceable production.
Apply Proportionate Scrutiny to Strategic Sectors
Several provisions within the US-Bangladesh agreement extend beyond conventional trade policy.
The United States will work with Bangladesh to streamline and enhance defence trade. Bangladesh is expected to encourage shipbuilding and shipping by market-economy countries. The agreement also addresses export controls, inbound-investment transparency, cybersecurity protections for ports and logistics systems, sensitive-technology software supply chains and limited restrictions relating to nuclear procurement. ⁸
These provisions should not dominate the public debate. Nor should they be interpreted through an ideological lens.
They should be treated proportionately as matters requiring careful legal review, procurement discipline, lifecycle-cost analysis, interoperability assessment and inter-ministerial coordination.
Bangladesh must understand how strategic-sector decisions interact with its international commitments while preserving the flexibility to pursue commercially sound relationships with multiple partners.
Evaluate Investment Quality, Not Headline Value Alone
Chinese investment can support Bangladesh’s development, particularly in infrastructure, industrial zones, logistics, water-resource management, energy and technology.
The May 2026 meeting between the foreign ministers of Bangladesh and China referred to Belt and Road cooperation and Bangladesh’s request for Chinese involvement in the Teesta River Comprehensive Management and Restoration Project. ⁹
Every major project should nevertheless be assessed transparently.
The relevant questions are practical.
Will the project create genuine domestic value addition?
Will it transfer skills or technology?
Will it generate sustainable employment?
Is the financing structure affordable?
Will debt servicing place pressure on foreign-exchange reserves?
Were procurement alternatives assessed fairly?
Does the project increase concentration risk in a strategically sensitive sector?
This is not an anti-China, anti-United States or anti-investment approach. It is sound economic governance.
Distinguish Announcements from Bankable Outcomes
High-level visits frequently generate large headline figures. However, an exploratory discussion is not the same as an operational investment.
Bangladesh should classify each major proposed commitment according to a transparent maturity ladder.
The first stage is an exploratory discussion.
The second is a memorandum of understanding.
The third is an approved project.
The fourth is an executed financing agreement.
The fifth is a disbursed investment.
The sixth is an operational asset or completed transaction.
This distinction would improve public accountability and allow policymakers, investors and citizens to assess whether diplomatic engagements are producing measurable economic value.
Apply Commercial Discipline to Procurement Commitments
The US-Bangladesh agreement also contains substantial commercial considerations.
Bangladesh should endeavour to facilitate purchases of US civilian aircraft, parts and services. The agreement records Biman Bangladesh Airlines’ intention to purchase 14 Boeing aircraft, with an option for additional aircraft.
It also refers to US energy products, including long-term liquefied natural gas offtake agreements with an estimated value of US$15 billion over 15 years.
The framework further refers to US agricultural products with an estimated total value of US$3.5 billion. These include wheat, soy products and cotton. The wheat component is stated as at least 700,000 metric tonnes per year for five years. ¹⁰
Such purchases may support food security, energy diversification and bilateral trade.
However, each transaction should still satisfy normal procurement standards. These include pricing, quality, freight economics, security of supply, lifecycle cost, foreign-exchange affordability and value for money.
Strategic relationships are strengthened when transactions are commercially defensible.
Broaden the Export Base Gradually and Realistically
Ready-made garments will remain central to Bangladesh’s economy for the foreseeable future. Export diversification should not be presented as an attempt to replace the sector.
The objective should be to reduce concentration risk by developing additional sources of export growth.
Potential areas for focused assessment include pharmaceuticals, leather and footwear, light engineering, agro-processing, information-technology-enabled services, shipbuilding and maritime services, and selected electronics or component-assembly activities.
The approach should be selective rather than indiscriminate. Each sector should be assessed against export demand, domestic capability, energy intensity, skills requirements, access to finance, logistics needs and the potential for local value addition.
Bangladesh’s graduation from least developed country status on 24 November 2026 will not create an immediate cliff edge in the European Union market. Under the EU’s transition arrangements, Bangladesh is expected to continue benefiting from Everything but Arms preferences for three additional years, at least until the end of 2029, while retaining an opportunity to apply for GSP+.¹¹
This is a valuable but time-bound adjustment window.
It should be used to improve productivity, strengthen labour and environmental compliance, deepen domestic value addition and prepare exporters for more demanding rules of origin.
UNCTAD’s modelling illustrates the scale of the longer-term exposure. Its Trade Preferences Outlook 2025 estimated that Bangladesh could face a 32% decline in total exports after the loss of LDC-specific preferences. The analysis attributed approximately 97% of the modelled export losses to apparel and footwear, with 77% of the overall loss linked to preference erosion in the European Union market. ¹²
This is a simulation rather than a forecast. Nevertheless, it demonstrates the urgency of preparation.
Preserve Regional Balance
Bangladesh’s China policy cannot be considered in isolation from India.
India remains relevant to trade, transit, energy, water management and regional security. The Teesta issue illustrates why national development priorities should be advanced through transparent and constructive engagement with all affected partners.
The Bay of Bengal adds another layer. Ports, maritime connectivity and coastal infrastructure are commercial assets, but they also have strategic significance.
Bangladesh should welcome productive investment while retaining control over critical infrastructure and avoiding unnecessary concentration risk.
The Rohingya crisis should also remain part of the diplomatic agenda. During the May 2026 foreign-minister meeting, China stated that it would continue supporting dialogue between Bangladesh and Myanmar and assist repatriation efforts to the best of its capabilities. ¹³
Bangladesh should continue engaging China while maintaining a wider regional and international diplomatic coalition.
From Opportunity to Execution
Bangladesh’s challenge is no longer to identify the opportunity.
It is to build the institutional capacity to evaluate commitments, implement reforms and measure outcomes consistently.
In an era of managed competition, the countries that succeed will not simply attract capital. They will evaluate it well, deploy it responsibly and convert diplomatic engagement into measurable national value.
References
- Bangladesh Sangbad Sangstha, ‘Chinese Envoy Invites PM to Visit China’, 23 February 2026; Bangladesh Sangbad Sangstha, ‘Kayser Seeks Chinese Investment in Kunming-Chattogram Road Link’, 12 June 2026.
- Office of the United States Trade Representative, Agreement between the United States of America and the People’s Republic of Bangladesh on Reciprocal Trade, signed 9 February 2026, art. 6.3.
- Ibid., art. 2.11(4).
- Ibid., Annex III, arts 1.18-1.26.
- Ibid., Annex III, Section 6, art. 5.
- United States Department of Agriculture, Foreign Agricultural Service, Bangladesh. Cotton and Products Annual, Report No. BG2026-0003 (Dhaka: USDA FAS, 6 April 2026), pp. 17-19.
- Ibid., pp. 11 and 19.
- Office of the United States Trade Representative, Agreement between the United States of America and the People’s Republic of Bangladesh on Reciprocal Trade, signed 9 February 2026, arts 4.2-4.3 and Annex III, Sections 3 and 6.
- Bangladesh Sangbad Sangstha, ‘Bangladesh Seeks China Support for Teesta Project’, 6 May 2026.
- Office of the United States Trade Representative, Agreement between the United States of America and the People’s Republic of Bangladesh on Reciprocal Trade, signed 9 February 2026, Annex III, Section 6, arts 1-3.
- European Commission, ‘Questions and Answers on the New EU Generalised Scheme of Preferences’, 28 April 2026; United Nations, ‘Bangladesh Graduation Status’, LDC Portal, accessed 13 June 2026.
- United Nations Conference on Trade and Development, Trade Preferences Outlook 2025. Navigating in Times of Uncertainty (Geneva: UNCTAD, 2026), pp. 31-34.
- Bangladesh Sangbad Sangstha, ‘Bangladesh Seeks China Support for Teesta Project’, 6 May 2026.
