Seoul Turns to Bangladesh to Reduce Trade Dependence on Major Powers

Picture Credit: National Geographic

South Korea is intensifying its efforts to diversify trade by looking toward Southwest Asia, with Bangladesh emerging as a priority partner in Seoul’s strategy to reduce reliance on its traditional heavyweights, the U.S. and China.

“Southwest Asia is home to 2 billion people, or 25% of the global population. It holds immense growth potential as an attractive consumption market,” Trade Minister Yeo Han-koo told the Korea Economic Daily. He confirmed that Seoul is accelerating negotiations with countries like Bangladesh and Pakistan under a broader initiative to build deeper links with the Global South.

Talks with Bangladesh on a Comprehensive Economic Partnership Agreement (CEPA) began in August. The pact would extend beyond tariffs to cover investment, services, intellectual property, and regulatory cooperation. Bangladesh, with 170 million people, is the world’s second-largest clothing exporter after China and has maintained annual growth of 6–7% in recent years.

South Korea is already the fifth-largest investor in Bangladesh, hosting over 100 firms including apparel giant Youngone Corp. which supplies global outdoor brands like The North Face and Nike. Despite this presence, bilateral trade totaled just $1.98 billion in 2024, placing Bangladesh 54th among Seoul’s partners. Yeo pointed to South Korea’s trade surge with India after a similar agreement in 2010 as a model for growth.

The shift comes as South Korea, where exports account for nearly 90% of GDP, faces headwinds from U.S. tariffs and slowing Chinese demand. August exports to ASEAN countries ($10.9 billion) surpassed shipments to the U.S. ($8.7 billion) and nearly matched those to China ($11.0 billion).

Looking ahead, Seoul is preparing “tailored trade agreements” with a wide array of Global South partners across the Middle East, Central Asia, South Asia, and Africa. Yeo stressed this diversification is vital to safeguard Asia’s fourth-largest economy against external shocks.