Bangladesh and Malaysia on Tuesday began formal negotiations on a free trade agreement (FTA), aiming to expand bilateral trade and investment and deepen economic partnership.
The three-day first round of talks began at a hotel in the capital and the two sides signed the Terms of Reference (ToR) at the opening session, outlining the framework and scope of the negotiations.
Both sides expressed their determination to finalise a modern, balanced and mutually beneficial deal by 2027.
Commerce Secretary Sharaf Uddin Ahmed Choudhury said Bangladesh-Malaysia ties have been strengthened by historical friendship and shared cultural and religious values.
Although bilateral trade is encouraging, he said, the vast potential for investment and trade diversification remains largely untapped.
He said Prime Minister Tarique Rahman and his Malaysian counterpart Anwar Ibrahim discussed concluding a sustainable and mutually beneficial FTA by 2027 during Rahman's visit to Malaysia in June.
"Today's first round of formal talks marks the start of the institutional process to deliver on that commitment," he added.
The secretary said the FTA is crucial for Bangladesh to tackle the challenges of graduating from the least developed country (LDC) category and to maintain its competitiveness in global markets.
As a meeting point of South and Southeast Asia, Bangladesh is a promising destination for Malaysian investors, he said, pointing to opportunities for joint investment in the halal industry, semiconductor skills development, digital trade, logistics and special economic zones.
He also thanked Malaysia for its support for Bangladesh's aspiration to join the Regional Comprehensive Economic Partnership (RCEP).
Rashidi Said, chief negotiator of Malaysia and head of its 31-member delegation, and Khadiza Nazneen, Bangladesh's chief negotiator and an additional secretary at the Commerce Ministry, were present, along with senior officials from both countries.
Rashidi Said said the proposed FTA is not merely a tariff-cutting deal but a strategic initiative to build a long-term and balanced economic partnership between the two countries.
Bilateral trade stood at around $2.84 billion in 2025, he said adding that the agreement would open up new opportunities for trade expansion, industrialisation and investment once in force.
He expressed hope that the negotiations would be completed by 2027 through mutual understanding, flexibility and a realistic work plan.
He also said the upcoming visit of the Malaysian Prime Minister to Bangladesh would give the process further momentum.
Khadiza Nazneen said the FTA would ease market access in both countries, reduce trade barriers and create new opportunities for investment and employment.
It would also make trade more transparent, simple and predictable, she added.
She said the talks are focusing on consensus, while safeguarding mutual interests, on key issues including trade in goods and services, rules of origin and customs procedures.
Delegates from both countries reaffirmed their commitment to reaching a balanced, effective and durable agreement through constructive dialogue, mutual respect and flexibility, reports UNB.
The first round of negotiations will continue until October 29.