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With the emergence of the Bangladesh–US reciprocal trade agreement, there has been an evident increase in interpretations of the process in terms of Bangladesh’s strategic autonomy. Where trade, geopolitics, and regulatory alignment were once distinct processes, their interconnections are now tightening, leaving Bangladesh with a critical choice in the years ahead.

The nature of the ongoing talks does not resemble that of a usual free trade agreement. Commentaries published by analysts in international policy outlets and research-based institutions, as well as official declarations by the White House, clearly show that this is an attempt to establish a framework for a reciprocal trade agreement. The latter would focus on easing selected tariffs and non-tariff barriers, increasing regulatory predictability, and fostering trade facilitation in specific areas such as garments, agriculture, technology transfer, digital trade, and intellectual property rights.

It appears that the structure of this agreement is determined by the new economic strategy adopted by the US in its dealings with the Indo-Pacific region. The American state no longer views free trade agreements as mere exchanges of products and services. Instead, it sees them as a means of setting common standards and establishing regulatory ecosystems for the benefit of the American economy.

Consequently, the relationship between the two nations has become less asymmetrical. While the US previously supplied mainly energy, machinery, and agricultural products to the Bangladeshi market, Bangladesh has exported billions of dollars’ worth of ready-made garments to the American market. However, the Office of the United States Trade Representative has repeatedly raised concerns about certain tariffs, customs clearance procedures, and non-tariff barriers in Bangladesh affecting agriculture and services. From the Bangladeshi perspective, the US continues to play a crucial role in employment-driven export growth as the country prepares to graduate from least developed country status.

The proposed reciprocal trade framework aims to address the above concerns, but not by introducing a traditional tariff-reduction scheme. Rather, it concentrates on regulatory convergence, transparency, and the facilitation of trade flows in select industries. Nevertheless, the document’s structure appears to remain highly advantageous to the US and its interests across industries such as labour compliance, environmental standards, intellectual property rights, and the digital economy.

Apart from economic matters, the trade agreement has recently begun to take on a distinctly political flavour. As policy commentaries and local media analyses have highlighted, the discussion is now taking place in the context of conditional cooperation. Even though this aspect was not officially included in the talks, the list of topics discussed during the negotiations has expanded significantly beyond the economic dimension.

Parallel to the trade discussion, it has become clear that both sides are interested in establishing cooperation in defence and security-related areas. For example, logistics support and information exchange are currently under discussion, even though these aspects are not covered in the current trade agreement framework. The idea of introducing a reciprocal agreement akin to GSOMIA or ACSA agreements in Bangladesh is also gaining traction in strategic and defence policy circles. However, as mentioned before, this is a very delicate matter for Bangladesh, as it could be perceived as military alignment.

In addition to the above, the ongoing negotiations have generated considerable internal debate among Bangladesh’s policy and business elites. While some believe that closer integration with the US economy is the key to securing Bangladesh’s export competitiveness and maintaining it in the face of a significant reorganisation of global value chains, others fear that the framework might introduce regulations that Bangladeshi companies may find too expensive and not necessarily helpful in increasing exports.

Moreover, many doubt whether the country’s negotiating position will enable it to receive meaningful concessions in politically sensitive areas such as agriculture or services. Lastly, concerns persist over whether Bangladeshi agencies and departments responsible for trade policy possess sufficient negotiation expertise to engage effectively in complex, high-stakes agreements.

The above trend raises a serious question about balancing economic cooperation with safeguarding Bangladesh’s policy autonomy. In general, Bangladesh has been known for maintaining balanced relations with all its main trading partners, including the US, China, India, and Europe. However, with the advent of the contemporary era of intense geopolitical rivalry, achieving this becomes increasingly difficult, especially when economic agreements impose additional, implicit geopolitical obligations on the parties involved.

While Bangladesh’s ability to negotiate trade-related issues has grown significantly, it still lacks the necessary experience and institutional capabilities to draft complex deals covering sectors such as digital trade and services, and to ensure consistent policy continuity throughout the process. Think tanks in Bangladesh have repeatedly emphasised the importance of developing more sophisticated, evidence-based negotiations in this area and fostering wider public participation in them.

The geopolitical situation makes Bangladesh’s position even more complicated. With the US seeking to diversify its economy and supply chains away from China, Bangladesh is becoming a potentially valuable partner for Washington. However, this places Bangladesh in an extremely complex situation, since it already has strong economic ties and infrastructure connections with China.

Thus, in the new environment, the negotiation process is turning into something much bigger than a simple trade agreement. It is becoming a way to recalibrate Bangladesh’s external economic relations in a multipolar world, where economic partnerships are increasingly intertwined with the strategic interests of all actors involved.

As mentioned earlier, the central question for Bangladesh here will be how it can engage with another nation without sacrificing its ability to act independently in other areas. Dhaka’s ability to accomplish this task successfully will largely determine what the future holds for Bangladesh.

Zillur Rahman is a political analyst and the president of the Centre for Governance Studies (CGS). He hosts ‘Tritiyo Matra’ on Channel i. His X handle is @zillur.

This article was originally published on The Daily Star.
Views in this article are author’s own and do not necessarily reflect CGS policy.