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Trade and Economic Security

Bangladesh

EU trade relations with Bangladesh. Facts, figures and latest developments.

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  • Bangladesh
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  • Negotiations and agreements
  • Trade policy

The EU and Bangladesh are currently engaged in negotiations for a Partnership and Cooperation Agreement (PCA) aimed at establishing a comprehensive framework to strengthen bilateral relations. The PCA will cover areas including trade, investment, governance, human rights, climate action, and sustainable development. 

The EU works closely with Bangladesh in the framework of the EU-Bangladesh Cooperation Agreement, concluded in 2001. This agreement provides broad scope for cooperation, extending to trade and economic development, human rights, good governance and the environment.

Bangladesh has been a WTO member since 1995 and, as a least developed country, benefits from the EU's 'Everything but Arms' (EBA) arrangement, which grants duty-free, quota-free access for all exports, except arms and ammunition. In 2017, the EU entered into enhanced engagement with Bangladesh under the EBA, in view of assessing compliance with human rights and labour rights conventions. 

Trade picture

  • In 2024, Bangladesh was the EU's 36th largest trading partner (accounting for 0.4% of the EU's total trade in goods), while the EU was Bangladesh's largest trading partner.
  • Total trade in goods between the EU and Bangladesh amounted to €22.2 billion in 2024 (with a deficit for the EU of €17.5 billion).
  • The EU's imports from Bangladesh are dominated by textiles, accounting for almost 94% of the EU's total imports from Bangladesh in 2024. The EU's exports mainly consist of machinery and appliances (35%) and chemical products (23%).
  • Total trade in services between the EU and Bangladesh amounted to €2 billion in 2023 (a surplus for the EU of €0.8 billion).
  • Total trade in goods and services between the EU and Bangladesh amounted to €23.9 billion in 2023.
  • Bangladesh is the largest beneficiary under the EU's Everything But Arms (EBA) arrangements, with €17.1 billion in exports benefitting from these preferences in 2023 - amid a 91% utilisation rate.
  • In 2023, the EU's foreign direct investment (FDI) stock amounted to €2.1 billion and Bangladesh's FDI in the EU was €95 million.   

The EU and Bangladesh

As a Least Developed Country (LDC), Bangladesh benefits from the most favourable regime available under the EU's Generalised Scheme of Preferences (GSP), namely the Everything But Arms (EBA) arrangement. EBA grants the 46 LDCs – including Bangladesh – duty-free, quota-free access to the EU for exports of all products, except arms and ammunition.

Thanks to EBA, 90% of Bangladesh's exports eligible for tariff reductions entered the EU at preferential rates in 2023. 91% of Bangladesh's exports to the EU enter duty- and quota-free. 

In July 2013, in response to the collapse of the Rana Plaza factory complex which killed scores of workers, the EU took the initiative of launching a Sustainability Compact for Bangladesh with the aim of improving labour rights and factory safety in the ready-made garment industry. The initiative brought together the EU, the government of Bangladesh, the USA, Canada – i.e. the main markets for Bangladeshi garment production – as well as the International Labour Organisation (ILO). 

Since March 2017, Bangladesh has been a beneficiary of the EBA's 'enhanced engagement' process, which further incentivises and facilitates beneficiary countries' progress with regard to 15 core internatinal conventions on human rights and labour rights covered in the GSP Regulation.  

In October 2019, the authorities of Bangladesh agreed to develop a National Action Plan (NAP) on the Labour Sector, with timelines for reforms to improve labour rights – notably the alignment of the Bangladesh Labour Act and the Export Processing Zone Labour Act – with the ILO fundamental conventions. The NAP was published by Bangladesh in September 2021, and implementation reports are made public twice a year.

Trading with Bangladesh