The Centre for Policy Dialogue (CPD), a prominent think tank that supported the 2024 regime change and the interim government, has called for an immediate review and potential withdrawal from a controversial trade agreement signed by Muhammad Yunus with the United States only three days before the elections.
Describing the deal as “extremely discriminatory” and a threat to Bangladesh’s economic sovereignty, CPD’s Research Director Khondaker Golam Moazzem expressed shock at its terms on Saturday, urging the new BNP-led government to renegotiate for a more balanced bilateral arrangement.
The criticism came during a media briefing in Dhaka, amid growing scrutiny of decisions made under the Yunus administration. The agreement, known as the Agreement on Reciprocal Trade (ART), has been thrust into further uncertainty following a recent US Supreme Court ruling that invalidated the legal basis for certain US tariffs, prompting new global levies that could undermine the deal’s benefits for Bangladesh.
In a strongly worded address at CPD’s Dhanmondi office, Moazzem highlighted how the agreement far exceeded initial discussions on tariff reductions. “When talks began on customs-related issues, the public was led to believe it was merely about reducing reciprocal tariffs from 35% to 20% through some procurement commitments,” he said. “But the final deal left us stunned and speechless. How an unelected government could sign such a pact and burden an elected one with it is incomprehensible.”
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Moazzem condemned the Yunus regime for the agreement, stating: “If there’s one thing to criticise the interim government for, it’s this deal.” He pointed to several “discriminatory clauses” that he argued compromise Bangladesh’s autonomy:
– Bangladesh cannot enter trade agreements with third countries unless they meet US standards.
– US service providers must receive equal treatment to local ones.
– Border management must align with US practices, meaning Bangladesh would have to mirror US decisions on deeming products from other nations harmful.
– Digital trade pacts with third countries are prohibited if they harm US interests.
– No additional conditions can be imposed on US companies or individuals operating in Bangladesh.
These provisions, according to Moazzem, pose a “major barrier” to Bangladesh’s economic independence and could hinder its smooth graduation from Least Developed Country (LDC) status. “Our policy-making freedom is at stake,” he warned, adding that opportunities exist to exit the deal, citing recent US Supreme Court guidance.
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Agreement’s Origins And Concessions
Signed on February 9, 2026, during the waning days of the Yunus interim government, the ART aimed to lower US reciprocal tariffs on Bangladeshi exports—primarily ready-made garments (RMG)—to 19%, with potential zero rates for textiles using US cotton. In exchange, Bangladesh made sweeping concessions, including:
– Duty-free or phased-zero access for over 6,700 US products, such as livestock, chemicals, machinery, and industrial goods.
– Removal of non-tariff barriers and alignment with US sanitary and phytosanitary standards, easing entry for US agricultural products, including biotech items without full local testing or labeling.
– Mandatory large-scale purchases, like Boeing aircraft, billions in US energy (e.g., LNG), and agricultural commodities (e.g., soybeans and wheat).
– Subsidy restrictions and geopolitical clauses that tie Bangladesh to US security measures, limiting deals with “non-market” economies like China or Russia.
Critics, including analysts like Kallol Mustafa, argue the deal disproportionately favours the US, risking local sectors like agriculture and manufacturing through market flooding and high-cost imports. Business leaders from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Employers Federation have echoed calls for reevaluation, emphasising the need to restructure for balance without outright cancellation.
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US Supreme Court Ruling Throws Deal into Limbo
The agreement’s future has been complicated by a February 20, 2026, US Supreme Court decision in a 6-3 ruling that struck down President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) for broad emergency tariffs. This invalidated the legal foundation for the reciprocal duties the ART sought to address.
In response, the Trump administration imposed a 10% additional tariff on most global imports effective February 24, with threats of escalation to 15%, using Section 122 of the 1974 Trade Act. This shift raises questions about whether the new tariffs will override the ART’s 19% rate, potentially increasing effective duties on Bangladeshi exports and eroding competitiveness in the US market—Bangladesh’s top export destination.
Commerce Secretary Mahbubur Rahman downplayed the ruling as a US internal matter but affirmed ongoing dialogue: “We are in regular contact with the US side. All aspects will be reviewed before final decisions.” Meanwhile, global repercussions include the EU pausing similar deal approvals and India delaying talks, heightening stakes for Bangladesh amid economic pressures.
Broader Calls For Audit And Transparency
CPD’s critique aligns with wider demands for accountability under the Yunus regime. Renowned economist Dr. Debapriya Bhattacharya, a Distinguished Fellow at CPD, has urged the new government to form a professional transition team for a “forensic review” of financial liabilities, procurement contracts, and foreign agreements inherited from the interim period.
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Speaking at a separate media briefing on February 20, Bhattacharya emphasised the need for transparency: “The former interim government entered into various foreign agreements—not only with the United States but also in other areas that may not yet be publicly known. These should be reconsidered.” He recommended preparing detailed ministerial briefings, publishing a White Paper, and presenting a full financial statement to parliament by March 2027.
Fellow economist Mustafizur Rahman supported phasing out costly remittance incentives and adopting a market-oriented exchange rate. Towfiqul Islam Khan highlighted macroeconomic weaknesses, including faltering investment and constrained fiscal space, advocating gradual reforms.
Bhattacharya’s call has gained traction, with stakeholders viewing it as essential to expose potential irregularities, recover funds, and renegotiate exploitative deals. “This is not a political vendetta but a dispassionate post-mortem,” he said, warning against rushing the government’s 180-day action plan without addressing inherited crises.
Renegotiation And Safeguarding Sovereignty
Senior journalist and political analyst Probir Kumar Sarker observes that the government should prioritise country’s interest and sit with the stakeholders to assess the ART framework amid new US tariffs, explore mitigations, and develop long-term strategies for US market competitiveness through diversification and diplomacy.
The CPD remains optimistic about renegotiation, with Moazzem stating: “The elected government should exit the existing deal and discuss a balanced bilateral trade agreement with the US, where both countries’ interests are protected.”
Amid accusations of “chaos, capitulation, and corruption” during Yunus’ 559-day tenure, this review could mark a pivotal step for the new administration to restore economic stability and public trust.
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