[🇧🇩] Strategic Aspect of Bangla-Japan Relation

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Japan brings Bangladesh into the folds of new security framework | East Asia Forum

Belying Japan’s new defence cooperation partnership with Bangladesh is a desire to balance regional influence and manage tension between Dhaka and Washington, writes Asif Hassan

eastasiaforum.org

Japan brings Bangladesh into the folds of new security framework​

Published: 18 November 2023Reading Time: 4 mins

Asif Muztaba Hassan

The OSA, which came into effect in April 2023, is Japan’s new security initiative that centres on assisting ‘like-minded’ countries with military aid amid the escalating regional security environment. The other countries currently included in the OSA are Malaysia, the Philippines and Fiji.

Outside of Tokyo’s ambitions to be a more involved geopolitical actor in the region, what is also apparent in Japan’s security considerations is the shared context in which the selected countries operate.

The Philippines has had numerous skirmishes with the Chinese People’s Liberation Army, coast guard and maritime militia vessels near Ayungin Shoal — an island in the South China Sea under Manila’s control but claimed by China within its ‘nine-dash line’.

In August 2023, Fijian Prime Minister Sitiveni Rabuka warned China and the United States against polarising ‘the Pacific into their camps’, amid growing US concern over China’s escalating activities in the region.

While willing to negotiate with China over the South China Sea dispute, Malaysia has made it clear that its state energy firm Petronas’ energy exploration sites fall within the country’s maritime borders.

Most countries selected for the OSA harbour grievances against China. Japan’s strategic thinking reflects the concerns of the United States and the Quad about China’s growing influence in the Pacific Islands. But it is unclear why Tokyo has allocated a distinct defensive budget towards Dhaka, which maintains warm relations with Beijing and purchases a significant portion of its weaponry from China.

Japan maintains economic partnerships with most Asian countries, particularly Bangladesh. Dhaka has received around US$25 billion in development and economic assistance from Tokyo since 1972 and around US$9.2 billion of this has been overseas development assistance.

Japanese companies were also behind the construction of Dhaka’s metro line. But the most crucial aspect of Japan’s economic engagement was the transfer of the Matarbari deep seaport construction from Chinese developers to Japan.

The least-discussed element of the bilateral relationship is the potential for defence cooperation and its significance for both countries amid escalating global geopolitical tension.

The OSA will take the form of grants, rather than loans, aimed at strengthening the region’s ‘comprehensive defence architecture’ without the burden of repayment. This will enable Dhaka to take a significant step towards its military modernisation goal.

While Bangladesh is intent on maintaining geopolitical neutrality amid the US–China power struggle in Asia, Dhaka and Washington have intensified their rhetoric against each other.

In April 2023, the United States highlighted instances of human rights violations by the incumbent party in Dhaka. In 2021, Washington levied sanctions on multiple Bangladeshi security officials for employing extrajudicial tactics while on duty and prohibited their entry into the United States. The United States also denied entry to various government officials, politicians and law enforcers suspected to have been complicit in rigging elections.

Bangladeshi Prime Minister Sheikh Hasina fought against Washington’s criticism, accusing the United States of seeking a regime change and underscoring its history of overthrowing governments that do not align with its interests.

This tension does not indicate a souring relationship between Washington and Dhaka over Bangladesh’s growing economic connections with China. It merely highlights the United States’ values-based foreign policy and its emphasis on the promotion of democracy.

Given this context, Japan’s inclusion of Bangladesh in the OSA holds strategic significance for several key reasons. Primarily, it serves Tokyo’s geopolitical interest in balancing China’s growing economic and defence investments in Dhaka and the surrounding region.

More importantly, Japan’s strategic cooperation manoeuvres are a testament to the Quad’s commitment to establishing a regional hold in South Asia. This will become especially pertinent should US–Bangladesh tensions continue to rise, as it would help to balance any potential strain in relations between the Biden administration and Hasina’s government.

Bangladesh’s enhanced ties with Japan seem to be an outcome of careful geopolitical balancing by all actors. Tokyo is well placed to manage the relationship between Shaka and Washington to ensure Bangladesh stays within the United States’ umbrella while maintaining its neutrality.

Asif Muztaba Hassan is a security researcher and journalist based in Dhaka, Bangladesh.​

 

[Saif]

Japan, BD need to work more for better business environment: Envoy

Ambassador of Japan to Bangladesh Iwama Kiminori said on Thursday that the Economic Partnership Agreement (EPA) and the Public Private Economic Dialogues (PPED) between Japan and Bangladesh are the two organs to move forward the business environment in the years to come. “We have to move for

thefinancialexpress.com.bd

Japan, BD need to work more for better business environment: Envoy​

FE ONLINE DESK

Published :​

Mar 14, 2024 22:27

Updated :​

Mar 14, 2024 22:27

Ambassador of Japan to Bangladesh Iwama Kiminori said on Thursday that the Economic Partnership Agreement (EPA) and the Public Private Economic Dialogues (PPED) between Japan and Bangladesh are the two organs to move forward the business environment in the years to come.


“We have to move forward to the continual dialogue between the two governments on the business environment,” he said.

The ambassador said this while speaking as the chief guest at the opening ceremony of the new office of HmAC on Wednesday, UNB reports.

He also uncovered a book “Taxation Handbook for Investors in Bangladesh” prepared by Howlader Maria & Co.

Japan recognises the paramount significance of Bangladesh's development acknowledging its role in shaping the business destiny, he said.

A growing number of companies are redirecting their focus on Bangladesh. Japan Bangladesh Chambers & Commerce of Industry (JBCCI) and JETRO Bangladesh offer valuable advice to companies in navigating the complexity of Bangladesh, according to a press release.

The synergistic collaboration between the Japanese Business Circle along with the embassy of Japan is manifested through a concerted effort to ensure a comprehensive and seamless support structure for companies venturing into Bangladesh, the release adds.​

 

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BD-Japan FTA talks: Zero duty may impact Indian exports to Bangladesh

A report by Indian think-tank CUTS International (Consumer Unity & Trust Society) has warned India about the possible impact of the proposed Bangladesh-Japan Free Trade Agreement (FTA) on its trade with Bangladesh. The report -- a quarterly analysis by CUTS Dossier on Preferential Trade Agreements

thefinancialexpress.com.bd

BD-Japan FTA talks: Zero duty may impact Indian exports to Bangladesh
Indian think tank says in a report
ISMAIL HOSSAIN
Published :
Apr 22, 2024 09:29
Updated :
Apr 22, 2024 09:29

A report by Indian think-tank CUTS International (Consumer Unity & Trust Society) has warned India about the possible impact of the proposed Bangladesh-Japan Free Trade Agreement (FTA) on its trade with Bangladesh.

The report -- a quarterly analysis by CUTS Dossier on Preferential Trade Agreements and India released two days ago -- recommends that India "exercise caution and closely monitor the progress of the Bangladesh-Japan EPA negotiations."

CUTS International anticipates that India's exports to Bangladesh could be adversely affected if Bangladesh offers zero duty on all products to Japan under the FTA, which is scheduled to be signed by December this year.

"Several products in sectors such as automobiles, metals, electricals and textiles may be largely impacted by the Bangladesh-Japan FTA," according to the CUTS International analysis of possible scenarios.

As Bangladesh seeks to expand its trade relations with Japan, the CUTS report recommends that India assess the potential impact on its own trade interests and competitiveness in the region.

The report suggests that India may need to consider strengthening its existing trade ties with Bangladesh, diversifying its export markets, enhancing its competitiveness and exploring partnership opportunities to navigate the changing trade dynamics effectively.

The report said while India has a Preferential Trade Agreement (PTA) with Bangladesh and there is the Agreement on South Asian Free Trade Area (SAFTA), addressing these concerns is crucial to maintaining India's export performance in this market and neutralising the shocks posed by future FTAs that Bangladesh may engage in.

"This calls for a comprehensive economic cooperation agreement between India and Bangladesh," the report suggests.

Bangladesh is not a big competitor for India in terms of access to the Japanese market, as India already enjoys a tariff advantage in Japan due to its Comprehensive Economic Partnership Agreement (CEPA), according to CUTS International analysis.

However, the report warns that India should assess the possible impact of Bangladesh's fast-growing textile and apparel sector, including footwear, which is gaining a comparative advantage over time.

"As Bangladesh is entering into FTAs, India's textile and apparel industry should be concerned about their prospective market access challenges to third-country markets."

However, the CUTS International analysis using its SMART methodology suggests that India is unlikely to experience significant market share loss for textile and apparel products in Japan.

"Still it will be better to take some precautionary measures," the report cautions.

The analysis also suggests that any reduction in India's exports of certain textiles, apparel, and footwear to Japan would likely be negligible.

While Bangladesh's current export value to Japan remains lower than India's, the gap is narrowing due to Bangladesh's export growth. Bangladesh's exports to Japan reached $1.70 billion in 2022, compared to below $1 billion in 2013.

India's key exports to Japan include petroleum oils, fish products, non-industrial diamonds and ferro-silicon manganese, accounting for 42.76 per cent of its total exports to the country.

Bangladesh's exports to Japan are dominated by various types of readymade garments and footwear for both men and women, contributing 55 per cent of its total exports to Japan.

India's exports to Japan began a steady rise in 2016 after a three-year downturn in 2013-2015. This growth continued after the Covid-19 pandemic. However, the overall value of India's exports to Japan has declined, falling from nearly $8 billion in 2013 to $5.70 billion in 2022.

In March, Dhaka initiated talks to sign the Economic Partnership Agreement (EPA) with Tokyo in order to retain the duty benefit after Bangladesh's scheduled graduation to a developing nation in 2026.

The Bangladeshi authorities said the EPA with Japan will be signed before December.

If trade deals are not finalised before 2026, LDC-graduating Bangladesh will need to seek bilateral agreements with World Trade Organisation (WTO) member countries to continue enjoying duty-free market access until 2029.

The 13th WTO ministerial conference in Abu Dhabi last month extended duty-free benefits for graduating LDCs for an additional three years. However, Bangladesh will still need to negotiate bilateral trade deals to retain these benefits in the long term.

Therefore, Bangladesh is pursuing preferential trade agreements (PTAs) such as Economic Partnership Agreements (EPAs), Comprehensive Economic Partnership Agreements (CEPAs), and Free Trade Agreements (FTAs) with major trading partners.

In 2022, Japan imported approximately $1.72 billion worth of goods from Bangladesh, with over 90 per cent comprising apparel items like clothing and footwear.

Conversely, Japan exported $2.57 billion worth of goods to Bangladesh, with iron and steel accounting for around 30 per cent of these exports.

A study by the Japan External Trade Organization (JETRO) in May 2023 found that the number of Japanese companies operating in Bangladesh has doubled over the past decade, reaching 338.

These firms could face challenges if Bangladesh experiences higher tariffs exceeding 10 per cent for certain textile products after graduating from LDC status.

This situation marks a first for Japan, as it has never negotiated an EPA with a country on the verge of leaving its LDC status.

Initial research into a potential EPA with Bangladesh began in December 2022, and the findings recommended launching formal negotiations.

The research suggested that an EPA would not only boost trade and investment between Japan and Bangladesh but also strengthen their political and diplomatic ties.

Besides, Japan is also keen on setting standards for tariffs and trade regulations, particularly as Bangladesh considers a free trade agreement with China.

The negotiations will focus on simplifying import and export procedures, including reducing excessive paperwork.​

 

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Japan-Bangladesh Joint Statement on Strategic Partnership

 

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2 more projects dropped

Two more development projects to be implemented following a public-private partnership module under Bangladesh-Japan joint initiative have been dropped.

www.thedailystar.net

Bangladesh, Japan JOINT PPP PLATFORM
2 more projects dropped

Two more development projects to be implemented following a public-private partnership module under Bangladesh-Japan joint initiative have been dropped.

The projects are expansion of Chattogram-Cox's Bazar Highway and the upgrading of Nabinagar-Manikganj-Paturia Highway into an expressway.

The decision came at the sixth Bangladesh-Japan Joint PPP Platform meeting held in Dhaka on March 18 this year, shows its minutes.

With the two, five projects have been dropped from the government-to-government initiative, which had created hopes of receiving huge investments from Japanese companies.

The development came at a time when most of the other projects under the initiative could not make significant progress over the last six years due to multiple problems.

Most of the projects were included in the list without carrying out any studies. So, when the studies were done, the projects were found not to be viable for PPP, leading to their exclusion from the list, officials said.

Besides, some Japanese companies involved in the process needed more engagement, they added.

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