Bangladesh must liberalize its services sector and align its investment and regulatory rules with international standards if it hopes to join the Regional Comprehensive Economic Partnership, the world’s largest free trade bloc, according to a new report by the United Nations Economic and Social Commission for Asia and the Pacific.
The ESCAP working paper, “Bangladesh’s Service Trade and RCEP Accession,” says the country’s service exports have grown rapidly over the past decade but remain narrow and heavily outweighed by imports. Bangladesh exported $6.4 billion in services in 2023, up from $3 billion in 2015, while imports rose to $11 billion, creating a $4.6 billion deficit.
The study found that RCEP members — including China, Japan, South Korea, Australia, and the 10 ASEAN nations — already account for about one-quarter of Bangladesh’s service exports and one-third of its imports. The largest export destinations in 2023 were China ($522 million), Singapore ($362 million), and Japan ($272 million).
Bangladesh applied to join RCEP in 2024, seeking to offset the loss of trade preferences when it graduates from least developed country status in 2026. The report says membership would give the country “reciprocal market access” and help anchor reforms that attract foreign investment and modernize the services economy.
ESCAP researchers found that Bangladesh’s overall services trade restrictiveness index stands at 0.39 on a 0-to-1 scale, indicating moderate openness. Restrictions are highest in professional services and transport, while construction and computer services are relatively open. Foreign investment rules still require government approval in 22 “sensitive” sectors such as banking, finance, and insurance.
The study urges Dhaka to simplify investment approvals, revise data localization requirements in the draft Data Protection Act, and strengthen infrastructure and digital connectivity. It also calls for clearer licensing rules for foreign professionals and stronger intellectual property protections.
Bangladesh has a strong comparative advantage in construction and business services but lags in travel, ICT, and transport, according to the report. Improving these weaker sectors, it says, would help diversify exports and increase competitiveness across Asia-Pacific markets.
The paper concludes that RCEP membership could boost Bangladesh’s integration into a regional market of 2.3 billion people with a combined GDP of $29.5 trillion — but only if the country moves decisively to liberalize and reform its service industries.