Economics and Trade

Bangladesh–US Trade Agreement in Focus Unequal, Rushed and Risky

Prof Selim Raihan warns the deal raises serious questions about Bangladesh’s economic sovereignty and geopolitical balanceA trade agreement signed between Bangladesh and the United States on February 9 — just days before a national election — has triggered sharp criticism from economists and policy observers.The Agreement on Reciprocal Trade, concluded by the interim government in the final days of its tenure, offers only a marginal reduction in US tariffs. Yet it binds Bangladesh to a sweeping framework covering defence, energy, trade, labour standards and digital governance.“The agreement could reshape Bangladesh’s economic autonomy, geopolitical balance and long-term development path,” said Professor Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM), in an extended interview.Raihan described the deal as “highly unequal”, “rushed” and “potentially damaging” to Bangladesh’s strategic independence. A Question of TimingRaihan’s first concern centres on timing. The agreement was finalised by an interim administration just days before the election — a move he believes sets a troubling precedent.“I do not understand why our interim government rushed to sign this agreement just before the election,” he said. “This should have been left to the newly elected government. Waiting one or two months would not have created major problems.”He contrasted Bangladesh’s approach with India’s slower and more cautious negotiations with Washington.“I was informed that India and the United States have not yet signed their trade agreement. If a country like India has not finalised such a deal, why were we in such a hurry?” he asked.Raihan argued that an agreement of this magnitude required parliamentary scrutiny and broad consultation with exporters, business leaders and trade experts.“Stakeholders were not properly consulted,” he said. “The process is deeply concerning.” Imbalance in ObligationsOne of Raihan’s strongest criticisms concerns the imbalance of commitments.“In the 32-page document, the phrase ‘Bangladesh shall’ appears 158 times, while ‘the United States shall’ appears only nine times,” he noted. “This shows that most obligations fall on Bangladesh.”Under the agreement, Bangladesh will open its market to approximately 6,700 US products — including chemicals, medical devices, machinery, ICT equipment, motor vehicles, beef and poultry. In contrast, the US grants duty-free or preferential access to around 2,500 Bangladeshi items.In return, Washington reduces its reciprocal tariff on Bangladeshi exports from 20 percent to 19 percent.“For a trade agreement between the most powerful economy in the world and one of the weakest economies among least developed countries, this is highly unequal,” Raihan said.“The weaker country is offering more, while the superpower is offering less. Bangladesh is effectively granting special and differential treatment to the United States.” Strategic and Sovereignty ConcernsBeyond trade, Raihan raised concerns about provisions that may constrain Bangladesh’s policy autonomy.The agreement requires Bangladesh to endeavour to increase purchases of US military equipment and restrict procurement from certain countries — language widely interpreted as targeting China. It also allows Washington to terminate the deal if Bangladesh signs trade agreements with countries classified as non-market economies.“In areas such as defence procurement and trade relations with other countries, Bangladesh may effectively require US endorsement,” Raihan said. “This raises concerns about sovereign decision-making.”The deal also emphasises “economic and national security alignment,” which Raihan described as potentially intrusive.“This is not just about trade. It is geopolitics,” he said. “Bangladesh is vulnerable in global geopolitical competition, and we must be careful.” Risk to Non-Aligned StatusRaihan warned that the agreement could gradually shift Bangladesh away from its long-standing non-aligned foreign policy stance.One provision requires Bangladesh to adopt complementary restrictive measures if the US imposes border or trade actions on national security grounds. Critics argue this could effectively bind Dhaka to US sanctions regimes.“If the United States bans products from certain countries, Bangladesh may be expected to support that,” Raihan said. “This could alter our non-aligned position.”Managing relations with China — Bangladesh’s largest import partner — would become particularly complex.“China is our largest import source, yet the US has ongoing trade conflicts with China,” he said. “If Bangladesh is pressured to reduce imports from China, it will be extremely difficult. We need balanced relations with everyone — China, India, the US and others.” ‘Zero Tariff’ ConfusionRaihan also criticised what he called misleading communication about tariff benefits.“When officials spoke of ‘zero tariff’ for products using US cotton, it actually refers to zero reciprocal tariff — not total tariff removal,” he explained. “The original Most-Favoured-Nation (MFN) tariff remains.”Many exporters reportedly misunderstood the provision as full tariff elimination. Managed Trade and Financial PressureAnother major concern is the shift toward what Raihan describes as “managed trade”.Bangladesh has committed to purchasing approximately $15 billion worth of US liquefied natural gas over 15 years, alongside increased imports of aircraft and agricultural goods.This includes plans for Biman Bangladesh Airlines to purchase 14 Boeing aircraft and at least $3.5 billion in US agricultural products such as wheat, soybeans and cotton.“The idea is to reduce the bilateral trade deficit,” Raihan said. “But this means importing more from the United States regardless of competitive pricing.”He warned that Bangladesh could be compelled to buy higher-cost goods even when cheaper alternatives exist.“This will put additional pressure on foreign exchange reserves,” he said. “How will we finance aircraft purchases and energy imports? There is a risk of increased reliance on foreign loans.” Labour and Regulatory ChangesThe agreement also requires amendments to labour laws, including expanded union rights and bringing export processing zones under national labour standards within two years.“Labour is a very sensitive issue in Bangladesh,” Raihan said. “If these provisions create uncertainty among investors, particularly in the garment sector, it could create serious problems.”He further expressed concern about clauses requiring Bangladesh to recognise US Food and Drug Administration (FDA) approvals for pharmaceuticals and medical devices — potentially weakening domestic regulatory authority. Limited PositivesDespite his criticisms, Raihan acknowledged some potential benefits.“There is a positive area in addressing non-tariff barriers,” he said. “But reforms should apply universally, not just for one country.”Reducing bureaucratic inefficiencies could benefit both domestic and foreign businesses, he added. A Dilemma for the Next GovernmentRaihan believes the agreement will present a significant challenge for the incoming administration.“The next government will already face domestic political and economic pressures,” he said. “They may seek a review rather than outright cancellation.”Cancelling the deal could harm Bangladesh’s credibility.“Signing and then cancelling sends a negative signal to trading partners,” he noted.Yet moving forward would lock Bangladesh into long-term financial and strategic commitments.“The pressure will remain — financial, strategic and geopolitical,” Raihan said.“We need everyone — China, India, the United States and others. Maintaining that balance is crucial for Bangladesh’s future.” Selim Raihan12 February 2026, 00:00 AMThe Daily Start