The Asian Development Bank (ADB) estimates that after Bangladesh leaves the least developed country (LDC) in 2026 and loses its preferential trade benefits, exports might drop by 5.5 per cent to as high as 14 per cent, notably with lower profits from the EU.
Bangladesh’s export sector, especially the garments industry, is highly concerned about the implications of its impending LDC graduation. Currently, over 70 per cent of the country’s merchandise exports benefit from LDC-specific trade benefits.
Depending on the trade policy of donor nations, Bangladesh may lose these advantages after graduation and be exposed to less favourable trade conditions or Most Favoured Nation (MFN) tariff rates.
According to research by the ADB titled Expanding and Diversifying Exports in Bangladesh: Challenges and the Way Forward, several studies indicate that higher tariffs may have the unintended consequence of significantly reducing Bangladesh’s exports due to LDC graduation.
ADB research states that Bangladesh’s policy options for supporting the export industry through subsidies will be limited by LDC graduation.
For example, although export subsidies are normally prohibited for members of the World Trade Organisation, LDCs are excluded from this rule.
