Bangladesh’s RCEP Ambition: Balancing Opportunities and Challenges in a Shifting Global Order

Sadik Sagar Dhaka November 6, 2025

The Regional Comprehensive Economic Partnership (RCEP), the world’s largest trading block, has become a cornerstone of modern global trade and geopolitics. Comprising 15 nations — including China, Japan, South Korea, Australia, New Zealand, and the ASEAN countries — the block represents a combined population of 2.3 billion and an economy worth $25.8 trillion, or about 30 percent of global GDP. With its sweeping framework for tariff reductions, investment facilitation, and technological cooperation, RCEP is reshaping economic integration across Asia and beyond.

For Bangladesh, set to graduate from The Least Developed Country (LDC) status in 2026, joining RCEP has emerged as a pressing strategic consideration. The country’s remarkable economic growth over the past decade and its ambition to become the world’s 25th largest economy by 2035 demand broader market access and greater resilience in global trade. As preferential market benefits under LDC status gradually phase out, Bangladesh must look toward alternative platforms to sustain its export momentum — and RCEP could be the most viable path.

Bangladesh’s export success so far has largely depended on Western markets, particularly the European Union, United Kingdom, and the United States, where it currently enjoys duty-free or preferential access under the Generalized System of Preferences (GSP). However, these privileges will end after LDC graduation. In contrast, RCEP offers access to a rapidly growing Asian market, home to economies that are driving global demand and industrial growth. The bloc’s goal to eliminate up to 90 percent of tariffs among its members within two decades could give Bangladesh’s exporters a powerful competitive advantage in sectors such as garments, textiles, leather goods, and pharmaceuticals.

A 2022 study by the Bangladesh Trade and Tariff Commission estimated that joining RCEP could raise Bangladesh’s export earnings by $5 billion, offsetting much of the projected $7 billion loss expected from the withdrawal of GSP facilities. It also projected that the country’s overall exports could rise by 17 percent, while GDP could expand by 26 percent in the long term. The ready-made garments (RMG) industry, which accounts for more than 80 percent of Bangladesh’s exports, would be the biggest beneficiary, gaining tariff-free access to major Asian markets such as China, Japan, and South Korea. Vietnam, one of Bangladesh’s key competitors, already enjoys such benefits as an RCEP member. Without joining the bloc, Bangladesh risks losing ground to competitors that can export more cheaply due to preferential tariffs.

The potential benefits extend beyond garments. Bangladesh’s growing e-commerce sector — expected to be valued at around $3 billion by 2024 — could also find new opportunities in Asia’s expanding digital trade ecosystem. RCEP’s provisions on e-commerce and digital services could attract foreign investment and technology partnerships, improving logistics, data infrastructure, and online retail systems.

Another major incentive is investment. Bangladesh’s foreign direct investment (FDI) inflows currently stand at around 1 percent of GDP, one of the lowest in Asia. Membership in RCEP could make the country a more attractive destination for investors from capital-rich nations such as Japan, China, and South Korea. With low production costs, a large labor force, and improving infrastructure, Bangladesh could position itself as a manufacturing hub for industries relocating from higher-cost economies in East Asia. Such shifts would not only diversify exports but also strengthen domestic supply chains and foster skill development and technology transfer.

From a geopolitical standpoint, RCEP membership could also help Bangladesh maintain its strategic balance amid growing global polarization. While China leads the bloc, several members — including Japan, Australia, and South Korea — are close allies of the United States. This balanced mix allows RCEP to function as an inclusive, non-confrontational trade platform, offering Bangladesh a way to deepen economic ties without aligning too closely with any single power. If India, which opted out of RCEP in 2019, eventually decides to rejoin, Bangladesh’s participation could enhance its regional standing and influence as a key South Asian economic partner.

Yet, significant challenges lie ahead. Tariff liberalization could reduce government revenue, nearly 27 percent of which currently comes from import duties. It could also expose local industries to stiff competition from more technologically advanced producers in member states. Without adequate preparation, domestic manufacturers might struggle to survive. To mitigate these risks, Bangladesh must strengthen its industrial competitiveness, improve infrastructure, and invest in workforce training.

Moreover, RCEP membership involves compliance with international standards on intellectual property, labor rights, and digital trade — areas where Bangladesh must build institutional capacity. While talking to media, Dr. Obaidul Haque of Dhaka University, urged the government to prepare strategically, emphasizing that Bangladesh “should not sit idle” but must align its trade and geopolitical strategies in advance. Another scholar Dr. Abdur Razzaque of RAPID warned that joining RCEP will require opening domestic markets to imports from member states, demanding careful adjustments to tariff structures and domestic regulations.

While joining RCEP would not be immediate — negotiations and ratification could take several years — the long-term benefits likely outweigh the short-term challenges. The government has already initiated feasibility studies and inter-ministerial discussions to evaluate potential implications.

As global economic alliances shift and Asia consolidates its position as the center of global growth, Bangladesh’s engagement with RCEP could serve as both an opportunity and a necessity. The decision will ultimately test the country’s readiness to move from preferential dependence toward competitive integration — a crucial step in securing its future as a confident, globally connected middle-income economy.