Bangladesh, Malaysia Target Free Trade Agreement by 2027

Bangladesh and Malaysia aim to conclude a comprehensive Free Trade Agreement (FTA) by 2027. The two nations have also agreed to form a Joint Working Group (JWG) to ensure the continuous, safe, and mutually beneficial migration of Bangladeshi workers to Malaysia.

In addition, Bangladesh has extended a special invitation to Malaysia to invest in oil and gas exploration in the Bay of Bengal.

These developments were announced in a joint statement issued on Monday (June 22) following a bilateral meeting between Bangladesh Prime Minister Tarique Rahman and Malaysian Prime Minister Anwar Ibrahim.

According to the statement, Malaysia has set a target to finalize a Malaysia-Bangladesh Free Trade Agreement (MBFTA) by 2027 with Bangladesh, which stands as its second-largest trading partner in South Asia. During the meeting, the two leaders discussed accelerating the agreement, expressing their shared commitment to implementing a mutually beneficial and forward-looking treaty aligned with the modern global trading system.

The two prime ministers welcomed progress toward establishing the 'Malaysia-Bangladesh Joint Business Council' (JBC) to facilitate structured dialogue between their respective private sectors, aimed at boosting economic cooperation, two-way trade, and investment. They emphasized enhancing cooperation in high-value industries, including semiconductors, the digital economy, the halal industry, energy, and infrastructure.

Furthermore, Bangladesh and Malaysia decided to strengthen bilateral energy cooperation to ensure energy security and sustainable economic development for both nations. They urged the full utilization of the existing Memorandum of Understanding (MoU) regarding Liquefied Natural Gas (LNG) supply, LNG infrastructure, and petroleum products to advance direct negotiations between Petronas and Petrobangla.

Concurrently, Bangladesh specifically invited Malaysian companies to invest in oil and gas exploration in the Bay of Bengal, the extraction of mineral resources like coal and limestone, and renewable energy transition projects.

To ensure the uninterrupted, safe, and mutually beneficial migration of Bangladeshi workers to Malaysia, the two nations agreed to form a Joint Working Group (JWG).

The joint statement noted that this group, comprising representatives from both countries, will review various labor market issues and work toward making the recruitment process more efficient and transparent. One of the core responsibilities of the JWG will be to evaluate the existing MoU, reviewing its effectiveness and limitations to draft necessary recommendations.

Additionally, the group aims to lay the groundwork for a new, updated MoU that considers current market demands, labor realities, and changing dynamics within the migration landscape of both nations.

The statement further highlighted that both leaders recognized the importance of people-to-people contact and acknowledged the significant contribution of Bangladeshi workers to Malaysia’s development.

Malaysia responded positively to Bangladesh's proposal to increase worker recruitment. However, it noted that under Malaysia’s existing foreign labor policies, approvals for new worker quotas will be assessed on a case-by-case basis, depending on verified employer demand and sector-specific limits.

The joint statement added that for any approved worker quotas, both countries reaffirmed their commitment to recruiting personnel strictly through credible and qualified recruitment agencies to ensure the process remains transparent, fair, non-discriminatory, and competitive.