Brazil–Bangladesh Trade Agreements: Current State and Evolution
Md. Joynal Abdin
Founder & Chief Executive Officer, Trade & Investment Bangladesh (T&IB)
Executive Director, Online Training Academy (OTA)
Secretary General, Brazil Bangladesh Chamber of Commerce & Industry (BBCCI)
Brazil and Bangladesh established diplomatic relations in 1972, laying the groundwork for bilateral engagement[1]. For decades, trade between the two countries remained modest, with limited direct economic interaction due in part to geographic distance and differing economic profiles. In recent years, however, ties have strengthened and trade has grown, spurred by Bangladesh’s emergence as a manufacturing hub and Brazil’s role as a resource-rich economy[1]. High-level visits and renewed diplomatic outreach have marked a new chapter: for example, 2023 saw the first-ever visit of a Brazilian foreign minister to Dhaka, signaling Brazil’s intent to deepen relations with Bangladesh[2][3].
Early discussions on formal trade cooperation date back at least to 2018, when Brazil’s ambassador in Dhaka expressed interest in a free trade agreement (FTA) and helped establish a Brazil-Bangladesh Chamber of Commerce and Industry (BBCCI) to boost private-sector links[4][5]. At that time, Bangladeshi exports – chiefly ready-made garments (RMG) – struggled to penetrate Brazil’s market due to high tariffs, prompting Bangladeshi officials to seek avenues for tariff reduction[6]. Over the past five years, bilateral trade has expanded significantly (albeit from a low base), and both governments have begun laying the institutional groundwork for closer economic integration.
Current Trade Policies and Agreements
At present, Brazil and Bangladesh do not have any bilateral FTA or preferential trade agreement (PTA) in force. Trade operates under the World Trade Organization’s most-favored nation (MFN) rules, meaning Bangladeshi goods face Brazil’s standard external tariffs and vice versa. Unlike some of its Asian competitors, Bangladesh has no FTAs or special tariff concessions with any Latin American country[7]. This lack of preferential access puts Bangladesh at a competitive disadvantage, especially as countries like China, India, and Vietnam benefit from trade agreements in the region[7].
Tariff Barriers: Brazil, as a member of the MERCOSUR customs union, imposes a common external tariff that can be steep for certain goods. Notably, Bangladeshi apparel exports to Brazil are generally subject to a 35% import duty, a rate that has severely hindered Bangladesh’s market entry[8]. Bangladeshi officials and business leaders frequently cite this 35% tariff as a major barrier to expanding exports, since it erodes the price competitiveness of Bangladesh’s garments in Brazil[9]. For example, Bangladesh’s Federation of Chambers of Commerce and Industry (FBCCI) reports that in FY2022–23 Bangladesh exported only about $170 million in goods to Brazil, against imports of $2.59 billion – a massive trade gap exacerbated by the tariff wall on Bangladeshi products[9].
On the other side, Bangladesh imposes its own tariffs on imports from Brazil, though these tend to be lower on raw materials and essentials. Bangladesh is a major importer of Brazilian raw cotton, sugar, and soybeans, which are inputs for its textile and food sectors, and it has adjusted duties on such items to stabilize domestic prices. In 2023, for instance, Bangladesh’s National Board of Revenue halved the import duty on sugar (cutting specific tariffs from 3,000 to 1,500 Taka per ton of raw sugar) to tame food inflation[10][11]. This move benefited Brazil – the world’s top sugar exporter – by making Brazilian sugar more competitive in the Bangladeshi market[11][12]. Bangladesh has similarly kept import duties low or zero on raw cotton (a critical input for its garment industry), enabling duty-free or low-duty cotton imports from suppliers like Brazil[13]. These unilateral tariff adjustments by Bangladesh, aimed at consumer welfare and industrial supply, have had the side effect of strengthening its import links with Brazil in agricultural commodities.
Beyond tariffs, no comprehensive trade pact exists yet, but incremental steps have been taken. During Brazilian Foreign Minister Mauro Vieira’s visit to Dhaka in April 2024, the two countries signed a Basic Agreement on Technical Cooperation (TCA) to facilitate collaboration in areas such as agriculture, science and technology, and education[14][15]. While not a trade agreement per se, this TCA reflects growing economic diplomacy and could support capacity-building that indirectly boosts trade (e.g. sharing agricultural technology to improve crop trade). Additionally, Brazil and Bangladesh have institutionalized dialogues: a Joint Commission or annual bilateral meeting mechanism is in place, as evidenced by plans for a Brazil-Bangladesh annual meeting in Dhaka. The BBCCI, formed in the late 2010s, is actively organizing trade forums and matchmaking events to connect businesses[16]. These platforms, alongside high-level political engagement, are laying the groundwork for formal trade agreements.
Tariff Structures and Market Access Conditions
Brazil’s Tariff Structure: As part of MERCOSUR, Brazil applies a Common External Tariff that ranges widely by product. Industrial goods and textiles often incur high duties (up to 35%), whereas certain raw materials have lower rates. For Bangladesh’s top exports (apparel and textiles), Brazil’s tariff is at the maximum 35%[8]. This is a key reason Bangladeshi RMG exports have remained modest in Brazil despite high demand – they simply cannot compete on price when faced with such duties. Bangladeshi officials have repeatedly pointed out that lowering or eliminating these tariffs is crucial for balancing bilateral trade[6][9]. Indeed, Brazil’s former Ambassador João Tabajara de Oliveira Junior acknowledged in 2018 that an FTA reducing tariffs could significantly boost Bangladesh’s garment access to Brazil[6]. To date, however, Bangladeshi exports still face MFN tariffs in Brazil, as no preference scheme (such as a Generalized System of Preferences concession) is currently offered to Bangladesh by Brazil.
Bangladesh’s Tariff Structure: Bangladesh, for its part, maintains higher tariffs on finished consumer goods but relatively low tariffs on inputs. Brazil’s key exports to Bangladesh fall mostly in the latter category (commodities and industrial inputs). For example, raw cotton (vital to Bangladesh’s textile sector) is imported largely duty-free or at minimal duty by Bangladesh[17]. Soybeans and edible oil imports have also seen tariff relaxations when global prices spike, to ensure affordable supply. Sugar imports, as noted, have seen specific duty cuts to mitigate local price surges[10]. However, for certain processed foods or high-value agricultural products, Bangladesh may levy protective tariffs or taxes to support domestic producers. It’s worth noting that Bangladesh is set to graduate from LDC status by 2026, after which it will lose preferential tariff perks in many developed markets – a factor increasing its urgency to negotiate favorable terms with new partners like Brazil[18]. Both countries have also highlighted the need to ease non-tariff barriers and financial frictions. In a 2025 meeting, Bangladesh’s ambassador in Brasília presented proposals to ease letter-of-credit (L/C) procedures and other trade financing hurdles that businesses face when trading bilaterally[19][20]. Such trade facilitation measures, alongside tariff reductions, are expected to form part of any forthcoming agreement.
Bilateral Trade Performance: Volume and Key Commodities
Bilateral trade between Bangladesh and Brazil has grown in absolute terms, but remains imbalanced. Bangladesh runs a large trade deficit with Brazil, owing to heavy imports of commodities. The table below summarizes recent merchandise trade volumes:
Table 1: Bangladesh–Brazil Merchandise Trade (Bangladesh fiscal years, July–June)[21][22]
| Fiscal Year | Bangladesh Exports to Brazil (US$ million) | Bangladesh Imports from Brazil (US$ million) | Trade Balance (US$ million)¹ |
| 2021–22 | 109.2[22] | 2,240[21] | –2,131 |
| 2022–23 | 175.0[22] | 2,590[21] | –2,415 |
| 2023–24 | 147.0[23] | 2,660[21] | –2,513 |
- Negative balance indicates Bangladesh’s trade deficit.
As shown, Bangladesh’s exports have been a few hundred million dollars at most, while imports from Brazil are in the $2–3 billion range annually. In FY2022–23, for example, Bangladesh exported around $175 million to Brazil but imported $2.59 billion, yielding a deficit over $2.4 billion[9]. Total two-way trade has surpassed $2–2.7 billion per year in recent years and, by some accounts, may be on track to reach $4 billion if current trends continue[24][25]. Notably, Bangladesh’s exports to Brazil have shown high growth rates from a low base: export earnings jumped nearly 60% in 2022–23, making Brazil one of Bangladesh’s fastest-growing export markets that year[26]. This growth, however, was partially reversed in 2023–24 (exports dipped to $147 million) before rebounding again in 2024–25 to ~$187 million[23]. The volatility underscores how sensitive Bangladeshi exports are to global conditions and market access in Brazil. On the import side, Bangladesh’s purchases from Brazil have steadily increased, rising from about $2.24 billion in 2021–22 to $2.66 billion by 2023–24[21]. Even quarterly data affirm the uptrend: Brazilian shipments to Bangladesh in Jan–Mar 2025 were 36% higher than in the same period of 2024[27].
Key Traded Commodities: The composition of trade is concentrated in a few sectors on each side, reflecting complementary needs:
- Bangladesh’s Exports to Brazil: Over 90% of Bangladeshi exports to Brazil consist of ready-made garments (RMG) and textiles. These include knitwear and woven apparel such as jerseys, pullovers, T-shirts, trousers, shirts, jackets, and suits[28]. Bangladesh’s apparel industry – the second-largest in the world – has begun making inroads into the Brazilian retail market, especially as Brazilian importers seek competitive alternatives. In 2022, Brazil imported about $5.9 billion in textiles and clothing worldwide; Bangladesh supplied roughly $150 million of that, indicating room for expansion[18]. Beyond garments, Bangladesh exports a limited array of other goods to Brazil: pharmaceuticals (generic medicines), plastic products (e.g. plastic tableware), ceramic tableware, jute and vegetable fiber products (like jute yarn, bags, etc.), and some leather footwear or goods[29][30]. Pharmaceuticals and plastics have been identified as promising sectors – Bangladesh’s drug makers have a strong foothold in generics, and plastic home goods are a growing light-industry export – but their current volumes to Brazil are still small. Nevertheless, these non-apparel sectors signal potential diversification of Bangladesh’s export basket to narrow the trade gap[31].
- Bangladesh’s Imports from Brazil: Bangladesh’s imports are dominated by agricultural and primary commodities that fuel its growing economy. The top imports are cane sugar, raw cotton, and soybeans (and soybean oil)[21]. Brazil is a global leader in all three: it is the #1 sugar exporter, a top-2 cotton exporter, and a top soybean producer, making it a natural supplier. Sugar is imported by Bangladesh both raw (for refining) and refined, to meet demand for sweeteners; Brazil became the largest source of Bangladesh’s sugar in 2023 after tariff cuts improved its competitiveness[11][12]. Cotton is critical for Bangladesh’s garment industry – Bangladesh is the world’s second-largest cotton importer – and Brazilian cotton (known for good quality fiber) has gained market share as Bangladesh seeks to diversify away from a heavy reliance on Indian and West African cotton[32]. Soybeans and soy oil are imported to help produce cooking oil, poultry feed, and other food products; Brazil’s harvest fills supply gaps as Bangladesh’s own oilseed production is limited. In addition, Bangladesh regularly imports wheat from overseas to ensure food security – and Brazil, especially after disruptions in Black Sea wheat supply, has been an occasional source (Brazilian wheat is drawing interest from Bangladeshi buyers amid efforts to diversify grain import sources[33]). Brazil is also a major exporter of meat (beef, poultry); while Bangladesh produces most of its own meat, it has begun importing small quantities of frozen beef from Brazil for the processed food industry and could increase these imports if prices are favorable. Brazil’s foreign minister noted in 2024 that Brazil is eager to export more meat and wheat to Bangladesh, seeing appetite for these items in the Bangladeshi market[33]. Other imports from Brazil include edible oils, pulses, and occasionally machinery or transport equipment (for example, Bangladesh has shown interest in Brazilian agricultural machinery and even Embraer aircraft for its fleet, though no major deals have been finalized yet).
The balance of trade heavily favors Brazil due to the commodity-centric import profile. Bangladesh’s export earnings cover only a small fraction of what it spends on Brazilian imports each year[9]. This imbalance is one motivator for Bangladesh to seek improved market access in Brazil – to boost its exports and mitigate the deficit – as well as to attract Brazilian investment in Bangladeshi manufacturing to offset the flow of funds.
Ongoing Negotiations and Future Prospects
Recognizing the need for a formal mechanism to address tariffs and boost two-way commerce, both countries are now actively negotiating trade agreements. There are two parallel (and potentially complementary) tracks: a Bangladesh-MERCOSUR PTA and a Bangladesh-Brazil bilateral framework.
- MERCOSUR–Bangladesh Preferential Trade Agreement: Bangladesh has pursued the idea of a PTA with the MERCOSUR bloc (which comprises Brazil, Argentina, Paraguay, and Uruguay). In early 2023, Bangladesh’s Foreign Minister AK Abdul Momen went so far as to submit a formal request to join MERCOSUR as a member, arguing that if Bangladesh were “there in Mercosur”, its exports would face far fewer tariff barriers in South America[34][35]. Full membership for an Asian country in Mercosur would be unprecedented, but the bold request underscored Bangladesh’s intent to integrate with South American markets. MERCOSUR members responded by welcoming closer ties short of full membership – notably, Argentina and Brazil signaled openness to a preferential trade deal. In April 2024, during Brazilian FM Mauro Vieira’s Dhaka visit, Brazil formally welcomed Bangladesh’s proposal for a MERCOSUR-Bangladesh PTA and agreed to initiate negotiations at the earliest opportunity[36][37]. Both sides concurred that such an agreement – likely involving selective tariff reductions or quota-based concessions – would unlock business opportunities and exemplify South-South economic cooperation[38][39]. MERCOSUR as a bloc has increasingly sought trade pacts with Asian economies, and a deal with Bangladesh would follow in the footsteps of Mercosur’s agreements with countries like India or Egypt (though Bangladesh would be the first least-developed/former-LDC partner). As of late 2025, the MERCOSUR-Bangladesh PTA is under consultation and study, with diplomats indicating that groundwork (such as joint feasibility studies and defining scope) is in progress[40][41]. The PTA is expected to focus on a limited list of goods for mutual tariff concessions, rather than full free trade, to make it politically and economically palatable for both sides. For Bangladesh, securing duty-free or lowered-tariff access for its apparel and pharmaceutical exports is a priority; for Mercosur (and especially Brazil/Argentina), improved access to the Bangladeshi market for grains, sugar, poultry, and industrial goods is the likely ask.
- Bilateral Trade and Economic Cooperation Agreement: In parallel, Bangladesh and Brazil are working on a bilateral trade framework agreement. In July 2025, Brazil’s Central Bank President (and then-sherpa on economic affairs) Gabriel Galípolo conveyed Brazil’s keen interest in a “trade and economic agreement” with Bangladesh to boost commerce[42][43]. During a meeting in Brasília with the Bangladeshi Ambassador, the Brazilian side offered to soon send a draft Memorandum of Understanding (MoU) as the foundation for this agreement[43]. The proposed MoU – essentially an umbrella pact – aims to outline steps for reducing mutual tariffs, simplifying trade finance, and promoting two-way investment[20][43]. If negotiations proceed smoothly, both countries hoped to sign this MoU at their annual bilateral meeting in Dhaka in late 2025[44][45]. Bangladeshi officials describe this opportunity as “historic”, coinciding with Bangladesh’s transition out of LDC status and need for new trade avenues[46]. Such an agreement could be less comprehensive than an FTA but would formally commit both nations to gradually lower tariffs and address non-tariff barriers in priority sectors. It might, for example, set up tariff quotas or phased duty cuts on Bangladeshi apparel and Bangladeshi duty waivers on certain Brazilian agricultural exports, pending a fuller PTA or FTA later. Importantly, any bilateral deal would likely be structured to fit within Mercosur’s rules (possibly requiring buy-in from Mercosur partners), so it may take the shape of a Brazil-led Mercosur initiative.
Trade Facilitation and Investment: Both governments are also eyeing broader economic integration tools beyond just tariffs. They have discussed easing logistics and shipping connections, as current trade often relies on indirect routes (transshipment in Singapore or Europe) which add cost[47][48]. Improving direct maritime links or encouraging Brazilian shipping lines to include Bangladeshi ports could facilitate trade. There is also interest in bilateral investment: Bangladesh has invited Brazilian investment in sectors like textiles, energy, and agribusiness, while Brazil sees potential in Bangladeshi pharmaceuticals and technology services. In 2025, the two countries co-hosted a “Made in Bangladesh” trade expo in São Paulo to showcase Bangladeshi products and attract Brazilian investors, reflecting a new level of private-sector engagement[49]. Such initiatives complement the official agreements by building business-to-business ties.
Expert Commentary and Outlook: Trade experts and industry leaders on both sides are optimistic yet pragmatic about the future of Brazil–Bangladesh trade relations. Shahidullah Azim, a former vice-president of the BGMEA (garment exporters’ association), noted that Brazil’s large domestic market and growing apparel consumption present a “significant opportunity” for Bangladesh, especially if an FTA/PTA can eliminate the steep duties[18]. He emphasized that with Bangladesh’s LDC tariff advantages in developed markets winding down, forging FTAs with major economies like Brazil is vital to sustain export growth[50][51]. On the Brazilian side, officials recognize Bangladesh as a rising economic power in South Asia. Brazil’s Ambassador to Dhaka, Paulo Feres, lauded Bangladesh as a “new economic giant” and has expressed strong support for deeper trade ties[52]. Brazilian leaders also frame this partnership in South-South terms: both countries are influential in their regions and share development challenges, so there is a political will to cooperate on trade as a means to mutual development[53][54].
Looking ahead, trade professionals foresee a gradual but steady evolution of the Brazil–Bangladesh trade relationship. In the near term, we can expect the negotiation of tariff preferences on a limited range of goods (through the MoU or PTA) and increased trade promotion activities. Over the longer term, if initial agreements prove successful, they could pave the way for a full free trade agreement or even Bangladeshi association with Mercosur frameworks. Both countries have identified sectors to focus on: for Bangladesh, textiles, apparel, pharmaceuticals, jute, and leather are export-ready for Latin America[55][56]; for Brazil, agribusiness exports and energy cooperation are frontiers to explore in South Asia. High-level engagements – such as Bangladesh’s possible participation in BRICS (which Brazil supports) – may further strengthen political ties that facilitate trade deals[57].
Conclusion
In summary, Brazil and Bangladesh are moving from a historically distant trading relationship towards a more strategic economic partnership. The absence of prior trade agreements means there is significant room to formalize and improve terms of trade. Ongoing efforts to clinch a PTA or bilateral trade accord aim to reduce tariffs, address the lopsided trade balance, and open new markets for both countries’ goods. Bangladesh’s quest for duty-free access to Brazil – especially for its flagship garment exports – and Brazil’s interest in expanding its footprint in Asia’s emerging markets have found common ground in recent negotiations[58][42]. For investment and trade professionals, these developments signal that Brazil–Bangladesh trade is at an inflection point: the coming years could see lower trade barriers and higher volumes, with diversified products in the mix. Firms on both sides would be wise to monitor the progress of trade talks and the implementation of any agreements. A successful PTA or FTA would not only cut costs (through tariff relief) but also likely harmonize standards and improve trade facilitation, reducing the friction of doing business across the South Atlantic.
Crucially, the momentum behind Brazil–Bangladesh trade agreements reflects broader trends of South-South cooperation. As global economic dynamics shift – with both countries facing external tariff pressures (e.g. the US-China trade tensions, post-LDC graduation tariffs) – Brazil and Bangladesh are leveraging their partnership to mitigate risks and seize new opportunities[59][60]. The evolving agreements, backed by supportive commentary from trade organizations and government leaders, are expected to unlock opportunities in sectors ranging from textiles and agriculture to technology and infrastructure. If current plans materialize, the next decade could witness Bangladesh securing a firm foothold in Latin America’s consumer markets while Brazil cements its role as a key supplier and investor in Asia’s rising economies. This deepening inter-regional linkage stands to benefit not just the two countries involved, but also create a bridge between South Asia and South America for trade and investment flows.
Sources:
- Bangladesh Export Promotion Bureau & Bangladesh Bank data (via The Business Standard)[21][22]; Daily Star/FBCCI statements[9].
- Dhaka Tribune and Financial Express reporting on trade negotiations[6][38].
- BSS (Bangladesh Sangbad Sangstha) official news releases[42][43].
- Statements by FBCCI, BGMEA, and officials in various news sources[61][18].
- Fibre2Fashion and Daily Sun coverage of diplomatic visits[39][62].
- Tridge and other analyses on tariff changes and commodity trade[10][11].
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