Japan will continue to grant reduced-tariff access under its Generalized System of Preferences (GSP) to countries that graduate from the least developed country (LDC) category for an additional three years, according to a recent notification submitted to the World Trade Organization’s (WTO) Committee on Trade and Development. Bangladesh’s Ministry of Commerce has also confirmed Japan’s announcement.
The WTO said the notification was adopted on November 5 and released on November 7 at Japan’s request. Citing reforms to Japan’s tariff system related to eligibility for preferential treatment, the notification stated that Japan had reformed its tariff system to allow LDCs to continue receiving preferential tariff treatment up to three years after graduation from the category.
The reform is outlined in Article 8-2, Paragraph 3 of Japan’s Temporary Tariff Measures Law. The notification said that only countries determined as LDCs by the United Nations General Assembly, or those within three years of graduation, would remain eligible for Japan’s special preferential treatment for LDCs.
Explaining the purpose of Japan’s GSP, the notification said the scheme applies to designated imported goods from developing countries or territories and aims to help increase their export income, advance industrialization, and promote economic development. Japan continues to properly manage the GSP system with the goal of contributing to the economic progress of developing countries.
Exporters said the extended period is critical for adjusting to new competitive realities after LDC graduation. Representatives of Bangladeshi exporters and the Japan-Bangladesh Chamber of Commerce said that maintaining Japan’s tariff benefits will help Bangladesh transition smoothly and strengthen its foothold in the Japanese market. They noted that graduating from the LDC list usually entails losing tariff preferences in many markets, which has long worried exporters. The additional tariff pressure, they said, could have hurt Bangladesh’s competitiveness. They added that Japan’s decision has eased much of that uncertainty.
Mohammad Hatem, president of the Exporters Association of Bangladesh (EAB) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, “Japan’s announcement is extremely positive for Bangladesh’s export sector. Exporters were anxious about the post-graduation impact. This decision will ease much of that concern. Especially as Japan is one of the most promising markets for Bangladesh’s apparel exports, I believe this move will play a vital role in diversifying our export destinations.”
According to data from the Export Promotion Bureau (EPB), Japan is one of Bangladesh’s key export destinations in East Asia. In FY 2024–25, Bangladesh exported goods worth $1.41 billion to Japan, accounting for 2.92 percent of the country’s total export earnings. Ready-made garments are Bangladesh’s leading export to Japan. During the same fiscal year, knitwear exports totaled $601.17 million, while woven garments reached $584.3 million. Together, apparel made up around 84 percent of Bangladesh’s total exports to Japan. Other major export items included home textiles, leather and leather goods, footwear, and crustaceans.
Policymakers believe the notification submitted to the WTO will serve as a strategic advantage for Bangladesh, whose economy depends heavily on exports. They said that while graduation from the LDC category marks a development milestone, Japan’s decision will help protect the export-oriented economy from global risks.
A senior official at the Ministry of Commerce told Bonik Barta, “Japan’s announcement is very good news for Bangladesh. We will soon share this information with all relevant stakeholders.”
All in all, Japan’s decision to continue offering tariff benefits during Bangladesh’s LDC graduation process has brought significant relief. Representatives of Japan-Bangladesh trade organizations said this is not merely a policy gesture but a practical step that strengthens Bangladesh’s export potential. They added that discussions on a bilateral Economic Partnership Agreement (EPA) between the two countries have been ongoing for more than two and a half years. The agreement is expected to be signed soon. They believe that Japan’s latest move will likely accelerate that process.
Anwar Shahid, vice president of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI), told Bonik Barta, “We’ve learned from the Bangladesh government that the Economic Partnership Agreement (EPA) between Japan and Bangladesh will be signed very soon. Japan’s decision to extend preferential benefits for three years will be highly useful in the meantime. Until now, much of the talk around LDC graduation has been about taking the necessary steps and reforms. The business community is beginning to realize that these changes will take time. Japan’s extension gives us that breathing space. The European Union (EU) had already agreed to a similar three-year extension, and Japan’s announcement now completes that picture. This is a very positive move.”
Economists believe that trade relations between the two countries will grow even stronger once the upcoming Japan-Bangladesh EPA takes effect. The new extension will not only stabilize Bangladesh’s market access but also enhance the country’s appeal as a promising manufacturing and investment destination for Japanese investors. They added that Japan’s initiative will likely encourage other developed countries to expand similar preferential benefits for nations graduating from LDC status.
Calling Japan’s decision “highly positive” for Bangladesh, Dr. Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), told Bonik Barta, “This decision will allow Bangladesh to retain access to the Japanese market for another three years after its graduation from the LDC category. As a result, Bangladesh’s market access in Japan will remain uninterrupted. The move also sends a strong signal to Japanese investors that Bangladesh offers a favorable business environment, which could motivate them to relocate part of their production from Japan or China to Bangladesh. Moreover, Japan’s three-year extension will likely inspire other developed nations to offer similar preferential treatment to post-LDC countries.”