Dhaka eyes defence cooperation, FTA with Tokyo during Hasina’s Japan visit

Defence cooperation and a free trade agreement will be at the top of Hasina’s agenda during her upcoming visit to the Far East

Dhaka and Tokyo are gearing up to expand their ties beyond trade and investment to defence collaboration and free trade in 2022, marking the 50th anniversary of diplomatic relations. 

Discussion points on the issues will be thrashed out during Prime Minister Sheikh Hasina's high-profile state visit to Japan later this month, according to Masud Bin Momen, the secretary at the Ministry of Foreign Affairs. 

The signing of a 'letter of intent' on bilateral defence cooperation, laying the groundwork for future agreements, will be high on Hasina's agenda in Tokyo, said Masud. 

Official data reveals that Japan is Bangladesh’s single largest bilateral donor and under Tokyo’s Official Development Assistance programme, Dhaka has received $27.43 billion in grants and loans since 1972. 

Tokyo’s development assistance covers a wide range of areas, from energy and power generation to social, economic and infrastructure development, including the massive mass rapid transit (MRT) project, the most expensive development initiative in Bangladesh’s history. 

WHAT DHAKA, TOKYO SEEK TO ACHIEVE FROM A DEFENCE DEAL 

Dhaka, under the leadership of Hasina, has laid out its defence ambitions by introducing the “Forces Goal 2030” in 2009 with an eye to massive expansion and modernisation of the Bangladesh Army, Navy, and Air Force. 

The aim, later revised in 2017, is to build a three-dimensional force capable of conducting multi-platform warfare. 

Bangladesh has already procured state-of-the-art military hardware and upgraded equipment, including attack helicopters, unmanned aircraft, and anti-aircraft missiles, mostly from China and India. 

On the other hand, Japan’s legislature in 2015 repealed an almost six-decade-old clause in the constitution, which enshrined the far-east nation’s pacifist stance post-World War II. Since then, Tokyo has developed a regional strategy called 'Free and Open Indo-Pacific’, or FOIP. The key components of FOIP, according to Japan’s Ministry of Defence’s website, include trade, investment and infrastructure development as well as defence and security cooperation. 

HIGHLIGHTS

• Japan is Bangladesh’s single largest bilateral donor and under Tokyo’s Official Development Assistance programme, Dhaka has received $27.43 billion in grants and loans since 1972.

• Dhaka, under the leadership of Sheikh Hasina, has signalled its defence ambitions with the introduction of the “Forces Goal 2030” in 2009, which aims to develop a three-dimensional force capable of conducting multi-platform warfare.

• Bangladesh is already a part of Japan's 'Bay of Bengal Industrial Growth Belt' initiative, which forms the basis of projects such as the MRT line in Dhaka, the deep-sea port at Matarbari and terminal three of Hazrat Shahjalal International Airport. While the ‘BIG-B’ initiative primarily focuses on economy, infrastructure and development, it also allows Japan to expand its strategic influence in South Asia.

• The process of finalising a Comprehensive Economic Partnership Agreement is expected to begin during Hasina’s three-day visit to Tokyo. This is part of a broader process towards a free trade agreement.

• As Bangladesh is set to lose the trade facilities given to least developed nations, a survey found that a majority of businesses in the two countries expect Dhaka and Tokyo to sign an FTA.

Since 2014, Bangladesh has been a part of Japan's 'Bay of Bengal Industrial Growth Belt' or 'BIG-B’ initiative, Tokyo’s answer to China’s Belt and Roads Initiative, or BRI. 

The projects being implemented under the initiative are the MRT line in Dhaka, the deep-sea port at Matarbari and terminal three of Dhaka's Hazrat Shahjalal International Airport. 

China’s BRI is an ambitious plan to establish two new trade routes connecting the mainland with the rest of the world to develop an expanded, interdependent market and grow the country's economic and geopolitical power. 

Although the ‘BIG-B’ plan primarily focuses on economy, infrastructure and development, experts have pointed to the inherent geo-strategic elements of the initiative, which Japan is using to increase its strategic influence in South Asia. 

Last year, the Japanese Ambassador to Bangladesh Ito Naoki expressed his country's interest in expanding cooperation to defence with Dhaka, with an emphasis on maritime security. 

More recently at a programme in Dhaka, Naoki hinted at Tokyo’s interest in supplying hardware and other defence equipment while talking about the expansion of relations with Bangladesh. 

“I think we can emphasise further cooperation in defence and security. We are looking into the possibility of exporting defence equipment to Bangladesh as a Japanese defence contractor has shown interest in supplying hardware,” he said at the programme. 

Foreign Secretary Momen says the goal of Hasina’s three-day trip, starting on Nov 27, is to elevate the existing "comprehensive partnership" to a “strategic" one. 

In international relations terms, a strategic partnership represents the highest level of ties between two or more nations. 

Humayun Kabir, a retired diplomat, elaborated on the parameters of a strategic partnership. 

Dhaka’s goal is to elevate the existing comprehensive partnership to strategic partnership with Tokyo.

Foreign Secretary Masud Bin Momen

“When you talk about strategic partnerships, you consider things that are out of the box, outside of the bilateral bracket, and have a conversation about it,” he said.

Since the annulment of its pacifist stance, Tokyo has bolstered its defence cooperation with the US, which China, a historical adversary of Japan and a regional rival, finds suspicious, to put it mildly. 

Defence procurement and development projects are at the heart of Dhaka's close ties with Beijing. And, with Dhaka now looking to expand cooperation in these areas with Japan, Secretary Momen was asked if it could jeopardise Sino-Bangladesh relations. 

Brushing off any concerns, he said: “Bangladesh won’t engage in any conflict with anyone, period.” 

“Our [Bangladesh’s] friendship with Japan is very old. So, if they want to expand their existing infrastructure projects like Matarbari deep-sea port, we would welcome it. We will not be able to work if we keep taking into account who said what or if anyone is offended.” 

Dr Imtiaz Ahmed, a professor of international relations at Dhaka University, pointed out that the US, Japan’s closest ally, has long been seeking a more proactive approach to regional security from the island nation. 

And, Japan's position on defence and security has been shifting since former prime minister Shinzo Abe's terms in office, according to him. 

“Though Tokyo has adopted a different approach, they would like to compete with Beijing’s BRI, not in terms of security, but in terms of development. Both Japan and India approach the Indo-Pacific alliance strategy a little differently than the other two partners - the US and Australia.” 

Prof Imtiaz, however, advised Dhaka to tread cautiously before agreeing to any arms deal with Tokyo, especially in relation to price and any other potentially implausible conditions attached to the sale. 

“Dhaka should do its homework before agreeing to anything. If any strings are attached to the arms sales that may put Dhaka’s relations with Beijing in hot water, we should say no. Bangladesh should also survey the market for prices before agreeing to purchase any hardware,” he said. 

FTA A TOP PRIORITY 

Dhaka and Tokyo have been working for quite some time on the possibility of a free trade agreement, or FTA, to facilitate trade between the two countries. 

Before drafting an FTA, both countries are mulling over an agreement in the vein of the Comprehensive Economic Partnership Agreement, or CEPA, between Bangladesh and India. 

Foreign Secretary Momen said that the process of conducting a large-scale joint research and feasibility study on the integrated partnership agreement will be finalised during the prime minister's visit. 

“This is the first step. Then things will progress step by step in line with the rules.” 

The Japan External Trade Organization, or JETRO, and the Japan-Bangladesh Chamber of Commerce and Industry, or JBCCI, published the findings of a survey conducted in Dhaka in June on the possible outcomes of an FTA between the countries. 

As many as 100 Japanese and 30 Bangladeshi multinational companies took part in the survey. JETRO's Country Representative Yuji Ando said at the time that 85 percent of the participants, or 111 companies, expect an FTA to be signed. 

The survey found that 20 percent of Japanese companies could consider reducing production or shifting to Bangladesh’s competitors in South-East Asia, China, and India if Japan's preferential trade privileges are lifted after Bangladesh’s transition to a developing nation. 

Japanese Ambassador to Dhaka Naoki said at the release of the survey that Bangladesh and Japan will need a new arrangement, such as an FTA, as the South Asian nation would no longer be entitled to the facilities under the Generalised System of Preferences after its elevation to the status of a developing nation. 

Asked if a survey will be conducted by the governments of the two countries in continuation of the study by JETRO and JBCCI, Masud said the Japanese Ministry of Trade and Investment and its agencies may work on that in cooperation with JETRO. 

Prof Imtiaz said Japan has increased investment in Bangladesh as part of the process of moving factories away from China. 

“Free trade is not always free. We have to keep that in mind. Japan's interest has increased because it wants to move many industries away from China as China is becoming costly,” he said. 

“They [Japanese businesses] are more interested in economic zones because if they can move from there, their profit margins will increase.” 

With a population of around 170 million, Bangladesh's market potential also appeals to Japan, according to Prof Imtiaz. 

"Geo-politics is always an issue. But the business community does not move with politics. It always sees profits.” 

“However, we have to be careful not to damage other markets. If we do, we’ll face other problems." 

Noting that trade and investment will be a major focus of the prime minister's visit, Foreign Secretary Masud said that there will be a host of meetings on Nov 30, for which Bangladesh has prepared a large delegation, 

Free trade is not always free. We have to keep that in mind. Japan's interest has increased because it wants to move many industries away from China as China is becoming costly.

Dr Imtiaz Ahmed, professor of international relations at Dhaka University

Representatives of the Bangladesh Economic Zones Authority, Bangladesh Investment Development Authority and Securities and Exchange Commission will take part in the meetings. 

Hasina is also scheduled to meet executives of Japanese companies investing in Bangladesh's economic zones, according to the foreign secretary. 

Masud said Bangladesh will emphasise projects in which Japan is interested. The Economic Relations Division is working on finalising a few projects, which may be presented to the Japanese officials, he said. 

ROHINGYA ISSUE

Masud said Dhaka will seek Japan's cooperation in ensuring that more than a million of Myanmar's forcibly displaced Rohingya Muslims return home from Bangladesh. 

“Historically, Japan always maintained a good relationship with Myanmar, which may have waned lately with the return of the military junta and the suspension of democracy. Still, Tokyo wields some influence since it invests heavily in the country’s infrastructure development, which I believe can be used to assist us with the repatriation process,” he said 

Prof Imtiaz believes Dhaka can ask Tokyo to take a tripartite initiative, which China attempted before, to repatriate the Rohingya people. 

"Both Myanmar and Bangladesh have good relations with Japan. A tripartite negotiation is very much possible. The prime minister [Sheikh Hasina] can stress the matter to her Japanese counterpart.” 

[Writing in English by Adil Mahmood and Osham-ul-Sufian Talukder; editing by Turaj Ahmad]