Bangladesh and Malaysia are set to formally begin negotiations on a free trade agreement (FTA) today (27 October), focusing on draft texts, market access, product lists and a timeline for concluding the deal, as both countries seek to expand bilateral trade and reduce existing trade barriers.
The talks will launch at 10am at Pan Pacific Sonargaon Hotel in Dhaka, with Commerce Secretary Sharf Uddin Ahmed Choudhury inaugurating the event.
The two countries have already exchanged preliminary draft agreements which will be discussed following the opening session, officials of the commerce ministry said.
A 31-member Malaysian delegation has arrived in Dhaka to participate in the negotiations. Malaysia's team will be led by Dr Rashidi Said, senior director of the Asia-Pacific Economic Cooperation and Regional Grouping Division at the country's Ministry of Investment, Trade and Industry (MITI).
Khadiza Nazneen, additional secretary (WTO) at the commerce ministry, will lead the Bangladesh team.
A senior commerce ministry official, speaking on condition of anonymity, told TBS that the discussions would cover the texts of the draft agreements, a negotiation timeline and selected products.
The move follows discussions during Prime Minister Tarique Rahman's visit to Malaysia, when a joint statement set a target of concluding the FTA by 2027. The upcoming talks mark the first formal step towards achieving that goal.
Bangladesh eyes export diversification
Bangladesh's trade with Malaysia remains heavily skewed towards imports. In FY25, Bangladesh exported goods worth $282.55 million to Malaysia, while imports stood at $2.29 billion, leaving a trade deficit of around $2.01 billion.
Commerce ministry officials believe an FTA could improve tariff access for Bangladeshi products and open new export opportunities beyond the readymade garment sector, particularly in agricultural products, leather, footwear, pharmaceuticals, processed food and engineering goods.
According to the Export Promotion Bureau, knitwear was Bangladesh's largest export category to Malaysia in FY25, generating $113.49 million. Agricultural products earned $75.69 million, while woven garments brought in $65.32 million.
Other exports include petroleum products, plastics and rubber, engineering goods, pharmaceuticals, chemicals, home textiles, frozen food and furniture.
Energy dominates Malaysian exports
Bangladesh's imports from Malaysia are dominated by fuel and mineral oils, palm oil, chemicals, iron and steel, plastics, machinery and electrical equipment.
According to Malaysia's trade promotion agency MATRADE, Malaysian exports to Bangladesh rose 5.7% to 11.84 billion ringgit in 2024.
World Bank data show Malaysia exported $2.45 billion worth of goods to Bangladesh in 2023, of which fuel products accounted for $1.39 billion, or 56.58%.
Data from the Bangladesh-Malaysia Chamber of Commerce and Industry show Bangladesh exported $293.51 million worth of goods to Malaysia in FY24 against imports of $2.60 billion, resulting in a trade deficit of $2.31 billion.
Beyond tariffs
Officials said negotiations could also cover rules of origin, services, investment and manpower exports, alongside market access.
Opportunities to train and employ Bangladeshi workers in Malaysia's semiconductor industry may also feature in discussions as demand for skilled workers grows.
A key objective for Bangladesh is to maintain competitive access to the Malaysian market after graduating from least developed country status.